California Taking Significant Steps to Support Clean Energy in Low-Income Housing

California has announced a major new set of initiatives and finalized two agency decisions that will bring increasing amounts of weatherization and solar benefits to low-income residents of affordable multifamily properties, which represent one-third of the state’s low-income housing stock.

Until now, this sector has received little attention when it comes to clean energy initiatives in California. But state action over the past few weeks is changing that, which will benefit thousands of Californians living in low-income housing.

Cap-and-trade Funded Low Income Weatherization Program

In mid-January, the Community Services and Development Department finalized guidelines for its single- family and small multifamily low income weatherization program (LIWP). In addition to helping the state meet its greenhouse gas goals to cut dangerous emissions, LIWP will help reduce air pollution, improve public health, and reduce energy bills and water usage–all while stimulating the economy and creating jobs.

Funded through revenues from the state’s cap-and-trade auction of the gradually declining amount of permits for the state’s largest emitters, a total of $75 million over two years will go directly toward improving the efficiency of households in disadvantaged communities and providing solar photovoltaic panels to eligible homes. Measures are far ranging and go beyond current weatherization programs implemented by utilities through the California Public Utilities Commission (CPUC). For example, the new program will offer LED lighting; smart power strips; cooling, heating, and hot water replacements; and upgraded windows.

Distinguishing between Small and Large Multifamily Buildings

What may seem like a categorization nuance of these final guidelines is in fact a big deal. In its program, the Community Services and Development Department distinguishes between small and large multi-family dwellings based on whether apartment buildings have individual water heaters and heating/cooling systems (classified as small) or central systems (classified as large).

Why is this important? Previously, low-income energy efficiency programs have tended to neglect properties with central systems, at best, treating only tenants with individual heating or hot water units. As a result, the large multifamily building stock is especially in need of energy savings measures and tenants in these buildings have received far less benefit from weatherization programs.

The Community Services and Development Department is developing a unique pathway for this large multifamily subset of buildings, which will include whole-building audits and corresponding efficiency measures for the building as a whole. These guidelines are under development and are expected to be published in June 2015.

Governor’s Partnership with HUD

On January 29, Governor Jerry Brown and U.S. Department of Housing and Urban Development (HUD) Secretary Julian Castro announced a number of actions to expand financing for energy efficiency and solar energy in multifamily housing–following on the heels of the governor’s new goal to double the efficiency of California’s building stock.

Access to Building-level Data

While many have highlighted the governor’s new financing initiatives in partnership with the MacArthur Foundation, HUD, and the U.S. Department of Energy, fewer have emphasized his accompanying commitment to improve access to building level data for owners. Namely, the governor committed the state to

“obtain and ensure owner access to energy usage data, with appropriate privacy protections, for multi-family buildings and set data standardization and benchmarking efforts to ensure the data that is collected in a way that is accessible and can be used to track progress toward achieving their energy and climate goals.”

As building owners currently can’t assess even the monthly energy usage of their entire property due to utilities’ current interpretation of privacy regulations, this is a most welcome announcement.

MASH Program Extended and Improved

Also on January 29, the California Public Utilities Commission approved $108 million in additional funds for the solar affordable housing programs known as MASH (Multifamily Affordable Solar Housing) and SASH (Single-Family Affordable Homes). Half of these funds, $54 million worth, are allocated to the multifamily sector (via MASH), with a goal of 35 megawatts of installations. Established in 2008, the MASH program offers solar incentives to qualifying affordable multifamily properties. For additional details, see this blog by Everyday Energy or the full decision here.

Groundbreaking Policy Change to Overcome Split Incentives

The decision adopts a unique policy tweak designed to overcome the split incentive between the building owner’s investment in solar and the tenants’ payment of utility bills. The CPUC approved an enhanced incentive level for solar installations in order to deliver direct tenant benefits on utility bills. The reduction in bills will come through Virtual Net Metering. This added incentive level will, for the first time, ensure that benefits to low-income renters will be equivalent to those of single-family homeowners.

What’s Next

These program decisions and new initiatives all demonstrate a growing commitment to cut bills and electricity waste for California’s low-income multifamily tenants, while increasing the health and comfort of their homes. For example, improved insulation and furnace repairs or replacements result in reductions in unsafe indoor air particles.

Over the next several months, we can look forward to the CPUC tackling the state’s largest low-income energy efficiency program, the Energy Savings Assistance Program. The commission has scheduled a proceeding to set ESAP’s direction for at least 2016 and 2017 based on previous commission directives to make significant program enhancements for the multifamily sector. We can also look forward to the Community Services and Development’s launch of its large multifamily weatherization program this June.

California’s multifamily efficiency milestones represent a growing momentum toward providing more significant energy, financial, and health benefits to affordable multifamily tenants, and in turn, to our climate and environment at large because when smarter energy use leads to reduced electricity consumption we don’t need as much polluting fossil fuel generation to make it.