Non-Energy Benefits of Energy Efficiency Building Improvements

Multifamily housing retrofits provide a rich opportunity to reap energy efficiency (EE) savings. A 2009 report by McKinsey and Company estimated that there is an untapped $16 billion in energy cost savings in the sector. Despite this potential, the multifamily market has not captured investment needed to realize the energy savings, and the affordable housing sector faces additional investment barriers. This paper will make the case for the implementation of energy retrofits in affordable multifamily buildings by presenting the non-energy benefits (NEBs) associated with such upgrades. Specifically, we discuss:

Societal Non-Energy Benefits

• Environmental and air quality
• Economic

Utility Non-Energy Benefits

• Decreased costs

Owner Non-Energy Benefits

• Operations and maintenance savings
• Decreased vacancy
• Decreased energy bills

Tenant Non-Energy Benefits

• Health
• Comfort
• Financial stability

Societal, owner, and tenant benefits are also presented in a case study conducted during summer 2012 in Chicago, Illinois. The case study evaluates the NEBs of three affordable multifamily buildings, totaling 70 housing units. Highlights of the findings include that the buildings saw a 17 percent reduction in maintenance costs one year post retrofit and two-thirds of tenants felt that their units stayed cooler in the summer and warmer in the winter. Furthermore, a 19 percent reduction in gas usage post-retrofit represents $12,624 in savings, which is the equivalent to a 27 percent decrease in rental vacancy loss as a percent of potential receipts. The 70 units are individually heated by forced air furnaces. This case study  confirms that significant NEBs to owners are possible even in the presence of a split incentive situation where the majority of energy cost savings goes to the tenants.