Goal: Improve Residential Energy Efficiency
Policy: Build Contractor Capacity

Who is responsible for energy-efficiency upgrades? As key first steps to improving residential energy efficiency, homeowners and renters can modify their behavior with regard to energy use and also make small changes like switching incandescent light bulbs to compact fluorescent bulbs or adding weather stripping to leaky windows and doors. However, achieving significant savings in highly energy-inefficient homes and ensuring the inclusion of energy-saving measures in new development will often require a more extensive intervention that includes work performed by a contractor or other industry professional. This section describes the various parties that may be involved in performing energy-efficiency retrofits and upgrades, and the steps that state and local governments can take to support their work, promote development of a skilled

Photo courtesy of Jonathan Rose Companies

workforce, and ensure that home- and property-owners receive high-quality results.


Why does it matter who performs the work?

Although "green" building and a focus on energy efficiency have become increasingly popular in recent years, the steps involved in conducting a home energy audit and improving the efficiency of new and existing structures may be unfamiliar even to experienced contractors. Without proper installation and maintenance, actual energy savings will likely fall short of projections, resulting in little or no reduction in greenhouse gas emissions or utility bills. For these and other reasons, many states and localities require families or rental property owners who participate in subsidy or incentive programs to work with certified contractors to make sure that practitioners have the training that they need to deliver optimal results. "Turn-key" programs, typically available to owners of large multifamily projects, go even farther to offer a one-stop shop that provides access to experts in all phases of an energy-efficiency project -- from audits and financing to building retrofits and post-improvement assessments.


Where is this most applicable?

Any energy-efficiency incentive or financing program will have limited success without a ready workforce. This is especially true in communities that may be in the process of trying to bring weatherization or energy-efficiency programs to scale and reach a larger number of families. To address this issue -- and in some cases simultaneously promote workforce development -- some communities and non-profit organizations have initiated job training programs that teach participants to carry out energy audits and install energy-efficient building components.

Learn more about the entities involved in improving home energy-efficiency and the ways that state and local governments can work with contractors, property-owners and families to improve service deliver. Go back to learn about other policies that make homes more energy efficient.

Goal: Improve Residential Energy Efficiency
Policy: Build Contractor Capacity

Industry Professionals and Trained Practitioners

Many programs designed to catalyze energy-efficient investments require that participating families or property owners work with contractors that have received some form of green building certification. By requiring contractors to undergo rigorous training, state and local sponsors of energy efficiency programs help to ensure that the beneficiaries receive high-quality work and that public resources have been soundly invested. While professional contractors often play a central role in coordinating and performing residential energy efficiency improvements and development of new "green" projects, lower-skilled trainees also play a critical part in ensuring the work gets done. Click on the links below to learn more about how states and localities can support energy efficiency professionals: Offer trainings to foster development of an energy-efficiency workforce Provide checklists to help contractors meet program specifications Offer trainings to foster development of an energy-efficiency workforce States and localities can support re-training of building industry professionals, as well as workforce development programs that prepare a low-skilled or at-risk population for entry-level jobs in the energy industry and also help to develop "soft skills" such as interview and resume preparation. Retraining professionals Some practitioners view energy efficiency as a distinct sector within the building industry, while others conceptualize it as a "shift from standard practice" within existing sectors, including building design, construction, and operations. [1] Regardless of the prevailing viewpoint, workers engaged in auditing, constructing, installing, evaluating, and maintaining energy-efficient improvements generally rely on a unique set of skills. [2] Retraining enables workers already employed as HVAC technicians,

Tips for Homeowners: Choosing a Contractor Choosing a contractor to complete an energy efficiency project, however large or small, can be an intimidating process. Several national and local organizations have compiled tips to help simplify the process: -- ENERGY STAR, a joint program of the US Environmental Protection Agency and Department of Energy, offers ten items to consider when hiring a heating and cooling contractor. The ENERGY STAR website also includes a partner locator feature that makes it easy to search for builders, energy raters, and other professionals by state and metro area. -- As part of its Consumer Guide to Home Energy Savings, the American Council for an Energy-Efficient Economy provides tips for choosing a contractor, including links to professional associations that offer directories of certified practitioners. --California's Green Affordable Housing Coalition developed a fact sheet on Choosing a Green Building Professional, which includes suggested questions to ask of potential contractors. In addition, many energy-related organizations, such as the Center for ReSource Conservation in Colorado and New York's State Energy Research and Development Authority, maintain contractor referral lists available to the public. In some cases, as with Illinois' Midwest Energy Efficiency Alliance's Participating Energy Efficiency Contractor Network, contractors must complete trainings and meet other certification requirements in order to be listed.

lighting contractors, or other occupations in the construction trades to
respond to growing demand and adapt their skill set to include more energy-efficient services and products. To support these efforts, jurisdictions may offer or provide support to third-party training programs to make it easier for industry professionals to receive accreditation.

Goal: Improve Residential Energy Efficiency
Policy: Build Contractor Capacity

ESCOs and Energy Performance Contracting

Energy Services Companies (ESCOs) most commonly work with large clients, including public housing agencies, to achieve energy-efficiency improvements at scale. ESCOs conduct energy audits and recommend energy-saving interventions; arrange financing;

design and implement the improvements; and perform post-improvement assessments to verify energy savings. Through energy performance contracting, a practice unique to ESCOs and some of their nonprofit counterparts, ESCOs also assume all upfront costs, which are financed with expected savings from energy-efficiency upgrades. Energy performance contracts establish the terms by which contracting organizations re-pay the cost of capital improvements, labor, and project management. While contracts may be structured in several ways, they typically shift the financial burden of delivering improvements in building performance to the ESCO. This may be achieved in a couple of ways:

Photo courtesy of Urban Land Institute Development Case Studies

• With guaranteed savings contracts, the contracting organization agrees to a fixed-payment schedule based on projected energy savings; ideally, energy savings from lower utility bills will equal or exceed payments for each billing period. If the improvements fail to yield the projected reduction in energy usage during part or all of the payback period (depending on the contract), the ESCO pays the difference. Guaranteed savings contracts offer contracting organizations the least amount of risk, although ESCOs often charge a premium for this guarantee. Agreements may include additional incentives for ESCOs to achieve higher levels of energy efficiency. [1]

• Contracts that call for shared savings agreements split the energy cost savings between the ESCO and the contracting organization according to a pre-determined formula, so the ESCO receives compensation for its services only if the agreed-upon energy savings materialize. In many cases, the ESCO's share of the savings is greatest in the early years of the contract, and declines over the duration of the payback period. [2] With either arrangement, the contract should clearly describe methods for measuring and identifying the source of any energy savings, relative to the baseline, including stipulations for changes in building use and occupancy during the payback period, variable weather conditions, and other factors that may affect performance. (ESCOs may also undertake energy-efficiency projects without a guarantee or shared savings agreement; contracting organizations simply pay for the upgrades as they would when working with a traditional contractor.) As with all approaches, when the improvements have been paid off, typically over a period that can range in length from seven to 15 or even 20+ years depending on the scope of the project, the contracting organization enjoys the full utility cost savings. [3]

As noted, ESCOs work primarily with large clients where (1) transaction costs may be offset by the much larger total cost of the project, and (2) energy consumption and, accordingly, projected cost savings will reach a magnitude large enough to cover the scope of the work. [4] Public housing agencies (PHAs) represent one major area of opportunity for making energy-efficiency gains with ESCOs: According to one source, through 2009, public housing agencies invested some $730 million in energy performance contracts, yielding annual savings of approximately $120 million. [5]

Working with an ESCO The Energy Services Coalition, a national nonprofit organization with a membership composed of industry experts, provides on its website several sample documents to reference when considering working with an ESCO. These include a model Request for Proposals (RFP), interview questions to ask ESCO candidates, and a model Energy Performance Contract. The US Department of Housing and Urban Development provides similar resources intended for use by Public Housing Agencies and Indian Housing Authorities.

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Click on the links below to learn more about turn-key service providers: ESCOs and Energy Performance Contracting Energy Services Companies (ESCOs) most commonly work with large clients, including public housing agencies, to achieve energy-efficiency improvements at scale. Community-based Nonprofit Organizations An increasing number of community-based nonprofits that operate on a model similar to ESCOs have started to emerge, making the advantages of an ESCO accessible to owners of affordable rental properties.

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You are currently reading: Who performs the work? Many communities require that participants work with certified builders or contractors, or with trained program staffs to certify energy-efficiency retrofits. Other pages in this section: Strategies for supporting the energy workforce States and localities can support energy efficiency through informal channels.

[1] Financing Energy Efficiency in Buildings. By U.S. Department of Energy. Rebuild America Guide Series.

Goal: Improve Residential Energy Efficiency
Policy: Build Contractor Capacity

Community-based Nonprofit Organizations

In the past few years, an increasing number of community-based nonprofits that operate on a model similar to ESCOs have started to emerge, making the advantages of an ESCO -- limited up-front costs, reduced risk, and a knowledgeable expert to coordinate rehab and financing -- accessible to owners of affordable rental properties. For example, the Vermont Energy Investment Corporation, a nonprofit ESCO that has served the state since 1986, provides "financing, technical expertise, reliable information, and direct installation of measures to facilitate energy upgrades and investments in buildings", among other services. [1] The Corporation works with a range of clients, including public housing agencies and owners of multifamily affordable housing, often in partnership with the Vermont Housing Finance Agency. Because of its non-profit status, the organization "fill[s] a void left by commercial ESCOs" that may refuse to take on smaller projects or those with limited profit margins. [2] Other non-profits provide one-stop energy-efficiency services, although without the guaranteed savings provided by most ESCOs. One example of such a program, the Energy Savers Program, is highlighted below. Benefits of working with a "one stop shop" for energy efficiency An Introduction to EPD -- EPC Toolkit for Higher Education outlines several benefits from working with a community-based, one-stop shop for energy efficiency: Integrated, whole-building approach: Project developers for ESCOs and their nonprofit counterparts think holistically about opportunities to achieve energy savings, rather than focusing on a single system; Accountability over the long-term: Contracting organizations work with a single point of contact, rather than numerous specialized contractors, over the duration of the payback period; Blended paybacks: Payback periods for energy-efficiency improvements vary in length, and measures with short-term payback periods can help to subsidize more costly improvements that take longer to yield returns; Measurement and verification: Ongoing assessment of building performance and energy savings throughout the payback period help to ensure the proper maintenance and operation of the upgrades.

Solutions in Action

North Carolina's SystemVision program, a partnership between the North Carolina Housing Finance Agency (NCHFA) and a non-profit, Advanced Energy, provides incentives and technical assistance to non-profit housing developers for constructing Energy Star-compliant homes affordable to households earning less than 80 percent of the area median income. Through SystemVision, participating non-profit developers and local governments are eligible to receive up to $4,000 for each home developed. In addition to reducing development costs, SystemVision provides homeowners a two-year backed guarantee that their monthly heating and cooling utility bills will not exceed a set cost (typically $30/month). If the cost exceeds the set amount, Advanced Energy will reimburse the homeowner for the remainder of the bill. The guarantee is an important part of the program, ensuring he energy cost savings are transferred to the homeowner. Homes built to meet SystemVision standards prove that affordability does not compromise building quality. In 2005, NCHFA extended the SystemVision concept to multi-family development. As of 2009, over 1,900 affordable homes have been built throughout the state of North Carolina as part of the SystemVision program. Click here for more information on SystemVision.

Solutions in Action

Offered through a partnership between the Center for Neighborhood Technology , a non-profit "think-and-do tank" and the Community Investment Corporation, a non-profit mortgage lender, the Cook County Energy Savers program helps owners of rental properties with five or more units obtain low-cost financing for energy-efficient improvements. Started in January 2008, the Energy Savers program offers many of the same services offered by ESCOs, including: Complete energy assessments and specific energy-efficiency recommendations Financing options for implementing energy recommendations Assistance coordinating tax benefits and energy credits Construction oversight and bid package review Annual reports on energy performance [3] As part of the program, the Community Investment Corporation also offers financing for energy-saving improvements at sharply discounted interest rates. As of February 2010, the Corporation had provided more than $1 million in financing to program participants, and the Center for Neighborhood Technology had conducted approximately 9,000 energy audits in 300 buildings and completed retrofits in 3,500 apartments and rental units. [4]

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Click on the links below to learn more about turn-key service providers: Community-based Nonprofit Organizations An increasing number of community-based nonprofits that operate on a model similar to ESCOs have started to emerge, making the advantages of an ESCO accessible to owners of affordable rental properties. ESCOs and Energy Performance Contracting Energy Services Companies (ESCOs) most commonly work with large clients, including public housing agencies, to achieve energy-efficiency improvements at scale.

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You are currently reading: Who performs the work? Many communities require that participants work with certified builders or contractors, or with trained program staffs to certify energy-efficiency retrofits. Other pages in this section: Strategies for supporting the energy workforce States and localities can support energy efficiency through informal channels.

[1] Vermont Trims Energy Bills for Low-Income Families. September 1998. By the Environmental Protection Agency. Climate Change Solutions.
[2] Vermont Trims Energy Bills for Low-Income Families
[3] Cook County Energy Savers: A one-stop energy efficiency shop for multi-family building owners. By the Center for Neighborhood Technology.
[4] Cook County Energy Savers Program a Top U.S. Retrofit Performer: Innovative Program Moves to Scale Quickly, Achieves Effective Energy Savings. February 2010. By Christine Kolb. The Preservation Compact.

Goal: Improve Residential Energy Efficiency
Policy: Build Contractor Capacity

Strategies for Supporting the Energy Workforce

In addition to offering financial and other incentives for builders and developers to go green, states and localities can support energy efficiency through other, more informal channels. Click on the links below to learn more about strategies for supporting an energy workforce: Convene interested parties Sponsor staff trainings

Courtesy of Urban Land Institute Development Case Studies

Convene interested parties

States and localities enjoy a unique position that enables them to bring together key players in the housing and energy fields to consult on the development of policies or regulations. States and localities enjoy a unique position that enables them to bring together key players in the housing and energy fields to consult on the

development of policies or regulations. States may also wish to promote collaboration across industry sectors by convening a working group or groups that meet regularly to address key obstacles to improving the energy efficiency of new and existing housing, share information about successful initiatives and best practices, and submit grant applications and comments on federal programs. Public entities can leverage these efforts by forming partnerships with reputable non-profit organizations and industry associations. For example, 12 cities and counties recently partnered with the nonprofit Wyoming Energy Council (WEC) to submit a joint application for the Energy Efficiency Block Grant program to the US Department of Energy. (WEC also acts as a subgrantee for the Weatherization Assistance Program and sponsors the Home Performance with ENERGY STAR program for Wyoming.) Activities proposed in the application include retrofitting thousands of Wyoming homes to reduce energy consumption, providing energy-efficiency workshops and low-interest financing for improvements to homeowners throughout the state, and providing trainings to create a statewide network of certified contractors. The Wyoming Business Council's State Energy Office participated in oversight of the project, along with other industry organizations. [1]

Solutions in Action

The California Climate Action Team (CAT) was first convened in 2005 in fulfillment of an Executive Order directing the Secretary of the California Environmental Protection Agency to coordinate with the Business, Transportation and Housing Agency; Department of Food and Agriculture; Resources Agency; Air Resources Board; Energy Commission; and Public Utilities Commission in efforts to meet the state's greenhouse gas reduction targets. CAT members, representing these and other key organizations, develop strategies to reduce emissions and help to coordinate and implement these efforts on a statewide basis.

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Sponsor staff trainings

Some jurisdictions offer special trainings to familiarize housing department or planning agency employees with enforcement of an energy code or locally-developed or third-party energy or green building rating systems. Agency staff that have a deeper knowledge of these programs -- beyond the minimum level required to approve or deny a permit, for example -- may be better-prepared to assist and work collaboratively with builders and developers to ensure the successful completion of new projects.

The City of Seattle, for example, hosts brown-bag lunches for staff members to learn about green building issues, including private LEED-related workshops. (Seattle provides incentives for development of LEED-certified buildings.) [2] Seattle's Department of Planning and Development also offers the services of a "team of green building experts" to provide customized assistance to builders and developers as they plan and carry out sustainable building projects.

Solutions in Action

Maryland's Clean Energy Center -- established in 2008 as part of Governor O'Malley's "Smart, Green, and Growing" Initiative -- offers Solar Training Initiative training workshops intended to prepare public officials to manage the permitting and inspection processes associated with installation of Photovoltaic Systems. Among other issues addressed in the day-long session, the workshops enable building and electrical inspectors to identify proper installation procedures; clarify appropriate steps in the permitting process; and generally build familiarity with solar technologies. As noted on the course website, as public officials' comfort with solar systems grows, the permitting and inspection procedures will likely become more streamlined, resulting in lower installation costs and increased adoption of these technologies. Click here to learn more.

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You are currently reading: Strategies for supporting the energy workforce States and localities can support energy efficiency through informal channels. Other pages in this section: Who performs the work? Many communities require that participants work with certified builders or contractors, or with trained program staffs to certify energy-efficiency retrofits.

[1] Wyoming Energy Council Rallies 12 Cities and Counties to Jointly Apply for Federal Energy Efficiency Grant: Home Energy Makeover and Local Government Energy Efficiency and Renewable Installation Project Would Stimulate Over $13.4 Million in Home Improvements. December 2009. By Tiger Adolf. Wyoming Energy Council.
[2] Outreach and Education: An outreach strategy can raise awareness about green building and begin to change attitudes and behaviors. Leverage existing communication and outreach mechanisms to reach targeted audiences. Playbook for Green Buildings and Neighborhoods.