Faced with rising operational costs in Minnesota and nationwide, it’s becoming more and more challenging to keep affordable housing affordable. A new joint program from Xcel Energy and CenterPoint Energy aims to subtract some of those expenses through energy-efficiency upgrades — with little sweat for the property owner and potential savings for tenants.
With building technology changing fast, many apartments built just 10 or 15 years ago don’t incorporate today’s leading approaches to reducing electric and gas usage. But affordable housing owners often lack access to expert analysis and data about the value of potential energy-efficiency technology, and without new funding for capital improvements, it can be difficult for affordable housing owners to make the decision to invest.
The Minnesota Multifamily Affordable Housing Energy Network (MMAHEN) is working to change that.
Formed in 2015, MMAHEN is a coalition of energy and housing sector stakeholders, including MHP, with a goal to “increase energy efficiency and conservation in multifamily buildings (five units or more) in Minnesota by improving and expanding the use and equitable access of available resources.” The Xcel-CenterPoint program was supported and informed by those efforts.
Inspired by best practices nationally, the new Multifamily Building Efficiency Program offered through Xcel Energy and CenterPoint Energy offers both technical support and financial incentives to building owners and managers who are ready to make investments in their energy efficiency. Once their application is approved, building owners receive:
- A free whole-building energy audit
- Direct install of low-cost improvements such as LED lights and low-flow showerheads
- Consulting support and a report analyzing long-term opportunities for energy improvement
- Incentive payments after energy-efficiency improvements are implemented and verified
Impressive results for affordable housing
The program serves all multifamily buildings, but qualified affordable housing properties can benefit from increased incentives. Hope Community in south Minneapolis and Southwest Minnesota Housing Partnership, based in Slayton, are among the first affordable housing owners to pursue the program — and the results are promising.
“This program helped us to identify the lowest-cost, highest-payback improvements we could make to our Children’s Village Center, which was built in 2003 and houses 30 families, as well as our community center and offices,” Will Delaney, Real Estate Strategy and Assets Manager at Hope Community, said. ”Some improvements recommended by the program managers, such as adjusting the thermostat settings in our parking garage, don’t cost a dime. With the program incentives covering half of the total cost, we plan to invest about $10,000 in additional upgrades that will reduce our energy usage by 15%. This investment should pay for itself in operating savings in just one year.”
Lisa Graphenteen, Chief Operating Officer at Southwest Minnesota Housing Partnership, is similarly enthusiastic about the program after receiving the initial analysis.
“For the Storybrook apartments in Pipestone, which serve 41 senior households on fixed incomes, we now have a plan to reduce energy usage more by than 22% with improvements that will pay for themselves in less than two years,” she said. “The proposed upgrades will help our residents’ utility bills go down, making their affordable home even more affordable for them. It will also reduce the cost of operating these buildings over time, helping us to preserve it as an affordable place to live for generations to come.”
“The program is allowing us to make investments that we couldn’t do at construction or on previous rehab efforts due to budget limitations,” she added. “We’re really looking forward to future opportunities with this program and feel it is a great asset for multifamily properties.”
Tips from early adopters
Delaney, Graphenteen, and other early adopters shared several tips for peers considering the program.
- Buildings that have not been renovated in the past several years — and aren’t due for major capital reinvestment in the near future — are ideal candidates for the moderate upgrades available from this program.
- Projects built under Minnesota Green Communities standards may still benefit from upgrades of items such as aerators and lighting. Technology is advancing quickly enough that even these relatively new and efficient features may now be worth replacing.
- When calculating the benefit of an energy-efficiency investment, consider the benefit of saving staff time as well as savings on energy bills. For example, light bulbs that don’t need to be replaced frequently can keep property management and maintenance staff free to take on other tasks.
- Be aware that the process may be long. From initial application, it may take up to six months to complete the energy-savings analysis and report.
More opportunity ahead?
Xcel and CenterPoint recently shared plans to expand this program to serve more residential buildings over the next three years. Affordable housing owners who are already taking advantage of the program hope that this expansion is just the beginning, and that every affordable housing building in need of energy-efficiency improvements throughout Minnesota — including in other utilities’ home territories — can eventually benefit from a program like this one.
To learn more about efforts to align energy efficiency and affordability to benefit low-income renters, download this fact sheet about the Minnesota network and visit Energy Efficiency for All for more information from our national partners.