Program Design for Efficient Multifamily Buildings
Multifamily buildings present a number of technical and communication challenges to energy efficiency. To determine the energy savings and market potential of a multifamily program, CEE designed and ran a “Direct Install Plus” Multifamily Pilot Program. The pilot included free installation of low-flow showerheads, faucet aerators, and efficient lighting; along with recommnedations for cost-effective technical upgrades.
I sat down with Multifamily Project Coordinator Corrie Bastian to learn more about the program design process, which included a focus group of building owners and a custom energy use benchmark visualization.
Anna: The multifamily sector is notoriously hard to reach, due to split incentives between owners and residents. Did any other obstacles stick out to you?
In some cases, the utility metering makes it tricky and labor-intensive to understand what’s going on with the building’s energy usage. The meter may include a space like a heated garage. Or we saw one building was leasing another space and they’re paying part of its meter. Sometimes there’s one meter one gas appliance and the rest are on a separate meter. And then there are the different billing rates. For example, interruptible rates if they’re using partial oil, which affects how payback numbers work. I didn’t anticipate so much metering complexity. It can be tedious to figure out these types metering configurations and account for them when analyzing the building.
Anna: And building owners are concerned about the effect of resident behavior. They want to make their residents happy and keep their apartments full. They don't want to upset them with an overly low-flow showerhead or a poor product.
It can be challenging to effectively communicate with the residents. A lot of owners worry that if they turn down the boiler temperature, they’ll get complaints of under-heating because their residents have the expectation of really warm temperatures in the building and have a habit of opening the windows during the heating season. In situations when you have a lot of families in one building, it’s harder to predict the outcomes of turning down heating controls than in a single-family home. There are going to be people with feedback about it: 500 people rather than five.
Anna: You ran a focus group of apartment building owners and managers to refine your program structure. What sorts questions did you ask them?
We wanted to change or adapt the program structure to best serve their needs. What are their initial responses to energy-efficient equipment? What are their pain points around maintaining their building?
We were also hoping to gauge their response to pilot prototypes. Did it seem complicated or easy? In-depth enough or too in-depth? We wanted documented feedback: these were real folks and this is their real experience and their real thoughts around the program. We tested some marketing statements, to develop a language around the business of running a multifamily building. It’s very different than single-family.
Anna: You needed to pick up their vocabulary.
Yes, to talk about energy efficiency strictly from a business standpoint. My background is with single-family homeowners, where we could take more of an emotional slant with these issues. Another interesting vocabulary lesson we learned was that apartment managers call their renters "residents.” The term “tenants” is considered dated, and brings to mind a grumpy apartment manager who is unresponsive to renter complaints. They really view their renters as their customers, and want to keep them happy and residing as long as possible in their building.
Anna: For homeowners the big motivators are saving money and improving comfort. So what are the “hooks” for a building owner? Saving money? Helping the environment?
A runner-up for single family homeowners is feeling good about helping the environment. That wasn’t even a runner-up for building owners. They were concerned with maintaining comfort: they didn't want to over-adjust to the point where it was too dramatic and they’d hear about it from their residents. That could easily turn a seemingly cost-effective recommendation into something much more expensive, because of the labor cost to address those issues. It’s not just saving energy, it’s the payback and the ROI. "Is it quick enough? And if it is quick enough, will I still maintain enough comfort to avoid complaints?"
Anna: What were the most interesting things you learned from the group? Were they different from what you expected?
When we think of utility bills, we think gas and electric. The owners think gas, electric, and water. Sometimes the cost for the water is higher than their energy utility costs are. Building owners and managers bundle these costs, so they saw showerheads and aerators equally as a water-saving tool and as an energy saving tool.
We’re not a water-conservation program, but water savings is a potential benefit of our service. In our direct install, we incorporated a spreadsheet to note any running toilets or dripping faucets. We’d send it to building managers so they could arrange for repairs with their own maintenance staff. Managers voiced concern over not being able to get into units to check for that stuff very often. They saw our spreadsheet as a nice value-added service.
We had to take a whole different approach to pitching energy savings than in the single-family program. The vocabulary was a total changeover, and the bottom line is the bottom line, 100%. They don’t need to know anything about it other than it’ll save them money. And then they’ll take a second look. The marketing statement they liked the most didn’t have energy savings in the wording at all. It was “earn more profit on your building by lowering your utility bills." Lowering your utility bills could mean a gamut of things. I wouldn’t have thought that statement would be the most appealing. But that’s the one they picked.
Anna: Do you think the findings are specific to the Twin Cities building owners? Or universal across the country?
The majority of multifamily buildings in Minnesota are run by management companies, bigger businesses. Any place management companies own the bulk of the building stock will face a similar set of issues. Older cities with larger multifamily stock still have a larger proportion of smaller owner and managers, who tend to have a more “down-home” approach. To oversimplify, they’re a little bit more like single family.
In places where water is more expensive - the south or California - the water utility is a premium cost. So water conservation appeals to them more. Up here, most owners and managers are borderline about whether low flow devices cause more trouble than they’re worth.
Anna: In addition to the focus group findings, where did you look for pilot ideas?
We based a lot of the program design on CEE’s previous multifamily field research and experience in implementing other programs, both in multifamily, as well as residential and small business. The research helped identify the the most cost-effective improvements, which we used as the main targeted upgrades for our pilot.
Anna: What are the most cost-effective measures that an owner can implement?
A lot of the multifamily building stock in Minnesota is post-war. There aren’t a lot of cost-effective building envelope improvements. It’s mainly boiler controls - outdoor reset and cut-out controls. Many buildings already have the controls, but they’re complex to manage. Simply training people which buttons to press to achieve energy savings from the controls is one big measure.
On the domestic hot water systems with recirculation loops, we are recommending a demand-based pump controller that saves on water heating costs.
In larger buildings, we’re looking at the ventilation. Some systems are grossly over ventilating, and the rooftop ventilators can be really inefficient. This can waste a lot of energy. A related research project is investigating how to balance those systems and reduce energy loss.
Anna: How did you come up with the program design combination of direct install and upgrade recommendations?
We have run various multifamily and related small business programs over the years, so a lot comes out of that experience. The direct install component has been used effectively in our residential program, where it works out really well as a foot in the door - you can talk to people. And the free component - get the savings right away! That appeals to single-family owners but also to multifamily owners. We heard in the focus group that a lot of owners have installed low-flow shower heads and CFLs. But they were interested in having it done in one sweep, done right, and not having to pay for the labor.
During program design research, we also researched other programs across the country. This included Elevate Energy, who runs a very effective multifamily program in Chicago. They were kind enough to actually host us for a few days to come down and train us on their system. We especially liked their hand-holding approach for bigger projects like boiler replacement and air sealing insulation and boiler controls. Even though Chicago has a totally different building stock with different recommendations, we adopted their strategy of working closely with the building owners and managers and walking them through each step.
Anna: Could the parts of this pilot be applied in other parts of the country, or is it pretty Minnesota-specific?
It could be applied in mid-sized newer towns and cities with post-war buildings. Places like Chicago and New York City have more turn-of-the-century multifamily stock with energy saving opportunities.
Anna: Why did you decide to include benchmarking in addition to the Energy ScoreCards report?
Many building owners in the focus group were already tracking usage within their portfolio. But they didn't have an idea how their usage compared to buildings outside of their management.
Anna: What design principles did you use to create the benchmark visualization? It reminds me of the Home Energy Index because it’s easy to understand, but synthesizes a lot of data.
That’s what we were going for: something that would reveal what was going on with a quick glance. The single family score is a spectrum from 1 to 100, and it compares a home to its own potential. This is a quartile score; it’s a grade of A, B, C, or D that compares a building to similar buildings. We wanted it to be as basic as possible while giving our recommendations clout. “Your space heating was in the highest usage quartile. We could address that with your boiler controls.” It gives us a lead-in.
Anna: Do you think that comparison to other property owners is enough to motivate them to make a change
Yes! It’s logical, it’s an easy logic to follow when we review their report. The graphic’s on the first page, so they see it first and I explain it before talking through the recommendations.
Anna: What else have you learned so far?
Multifamily buildings themselves present complex issues, but there are complex interpersonal issues as well. Most building managers are “people-people.” They manage resident issues well, but many admitted they didn’t understand the mechanical side of the building. Because of that, it’s challenging for managers to communicate operational goals to their maintenance staff, and maintenance staff have their own take on building operation. Miscommunications happen that often result in energy waste.
We may present a report to building management saying “do X, Y, and Z” and you will save energy. But a motivated building manager may not necessarily have the skills explain the next steps to their maintenance people or time to work with them to see the project through. Or they might call a contractor who has no stake in the energy savings. It can be an ongoing challenge to see a persistence of energy savings. Our program addresses this issue by working with maintenance staff and building management to get everyone on the same page. This is an important part of the energy-saving process.