Neighborhood Energy Savers – Madison Pilot

Table of Contents Page

Introduction…………………………………………………………………………………. 3
Statement of Need……………………………………………………………………… 3
Barriers……………………………………………………………………………………….. 4
Information/Behavioral Barriers………………………………………………… 5
Financial Barriers……………………………………………………………………….. 6
Transactional Barriers……………………………………………………………….. 7
Neighborhood Energy Savers: A sustainable model………………… 8
Our Partners………………………………………………………………………………. 9
Target Market……………………………………………………………………………. 10
External Factors……………………………………………………………………….. 10
Pilot implementation steps………………………………………………………. 11
Workforce Development and labor standards………………………… 16
Apprenticeship Services………………………………………………………….. 16
The Weatherization Technician……………………………………………….. 16
Solar Installers…………………………………………………………………………. 17
HVAC/Sheet Metal Technician…………………………………………………. 17
Raising the bar on wage and benefits…………………………………….. 17
Pilot implementation chart……………………………………………………….. 18
Personnel functions and key staff…………………………………………… 19
Funding Request………………………………………………………………………. 21
Revenue Sources for financial stability……………………………………. 21
Summary: NES Projections…………………………………………………….. 23
Program Design and Evaluation: Logic Model………………………… 25
Neighborhood Energy Savers – Madison Pilot

Sarah, the busy Mom whom you met on

the front cover, now enjoys an energy
efficient home utilizing solar hot water and
a solar electrical system. Several new
neighbors are becoming vital people in
Sarah’s circle that cares for and helps raise
her children.

Six months ago Sarah only knew her next

door neighbors on each side. Sarah’s boys
were a handful. She worked part time while
the kids were in school. Summer presented
challenges that were difficult for Susan to
juggle. Keeping up with her errands, boys’ activities, cooking, and
housekeeping were all that she and her husband could handle.

The idea of making her home energy efficient had been on her mind ever
since she moved in and started paying her utility bills. Then, she heard that
improving her home helped address global warming. For several years this
idea had been on her mind but her family never seemed to have the extra
money. She didn’t know of anyone who had installed energy efficiency
improvements in his or her home. Plus, Sarah didn’t know whom to trust.
How would she proceed and with what money? What if she borrowed money
and it didn’t improve her home’s energy efficiency? Sarah also worried about
living with the mess created during the upgrade. Finally, there were the
questions of whether her husband would be transferred and whether they
would outgrow the house.

One day a neighbor knocked on her door and

asked Sarah to attend a meal prepared by her
neighbors. After the meal they talked about how
the neighbors were being invited to work to
improve their homes’ energy efficiency. They
learned about the advantages of solar energy.
She was told trained volunteers would offer a
free initial visit to provide tips and ideas to
interested neighbors and to see whether their
home would be a good candidate in which to
invest energy efficiency improvements. If a home
was a good fit and the owner agreed, a non-
profit support team would handle all of the
details involved in upgrading the home. Sarah
wasted no time signing up for the evaluation.

Sarah also learned that the neighborhood would earn

carbon credits by reducing energy bills and making
other activities in the neighborhood more energy
efficient. If neighbors utilized the energy contractor’s
Neighborhood Energy Savers – Madison Pilot

partners, funds from the contractors would be set aside to work on projects
chosen by Sarah and her neighbors

She soon received a visit from her neighbors who reviewed her utility bills.
They gave her a square foot score. Sarah learned that she would benefit
from a professional audit, which would give her a lot of detail on her home’s
specific performance and needs. Sarah received tips and free energy-saving
products, some of which were immediately installed. The decision to move
forward with the energy-saving improvements was clear to Sarah after she
heard that she could have a project advocate oversee her project, could be
100 percent financed, and that benefits from the program transferred to the
next owner. This was just what she needed! Sarah was excited to hear that
her home was a good candidate for solar. She invited the solar assessor to
provide a detailed review of her options.

It was during this meeting that Sarah learned she could participate with
others in a bulk solar purchase and installation bundle, thereby saving
money.

Sarah was thrilled with her home

improvements and to actually have a
solar system. Her kids were very proud
as well. Perhaps equally important, her
neighborhood came to life. People were
meeting each other, discussing their
projects, and sharing meals. Sarah met
several moms and grandmas whose
kids were no longer around. They were
more than happy to help her with child
care. Several committees formed on the
meal nights to begin planning other
neighborhood projects.

Best of all, Sarah loved the fact that her kids were turning everything off
without asking while turning up the air conditioner so there would be more
money available for the kids fund in the neighborhood.

We invite you to read more details in the following proposal about how
Neighborhood Energy Savers will unfold.
INTRODUCTION
Neighborhood Energy Savers is
a project of Tri Local Returns
which is a program of Wisconsin
Partners for Sustainability
(WISCPSA) to reduce home
energy consumption and
expenditures and carbon
emissions, and increase local
savings and jobs. Neighborhood
Energy Savers is designed as a
neighborhood-based,
sustainable model for achieving
significant energy savings and
carbon reductions required to meet Wisconsin goals. This proposals describes
the statement of need; the Neighborhood Energy Savers (NES) program; and
start-up funding request.

STATEMENT OF NEED
Consumption of fossil fuels must be significantly reduced to avoid potentially
catastrophic results of climate change for future generations. Among the
most cost-effective ways to reduce fossil fuel consumption and carbon
emissions is to increase energy efficiency followed by use of renewable
energy. Energy efficiency and renewable energy can also save people money
and strengthen local economies by generating local investments, jobs and
reducing the flow of money out of communities.
In response to this need, public policy is setting ambitious goals for energy
conservation. The Governor’s Task Force on Global Warming released its final
report on July 2008, Wisconsin’s Strategy for Reducing Global Warming. The
Report concludes that substantial reductions in greenhouse gas (GHG)
emissions are needed to avert the worst consequences of climate change. It
establishes statewide GHG reduction goals of:
• A return to 2005 levels no later than 2014
• A 22% reduction from 2005 levels by 2022
• A 75% reduction from 2005 levels by 2050
The Report recommends an Enhanced Conservation and Energy Efficiency
(ECEE) Program. The goal of ECEE is to achieve annual 2.0 % reduction of
the electric load and an annual 1.0% reduction (consistent with the Midwest
Governor’s agreement) to the natural gas load by 2015 after a ramp-up
period. Currently Focus on Energy achieves appropriately a 0.4 - 0.5%
annual reduction in electric usage and a 0.3% annual reduction in natural gas
usage. Thus the energy saving goal is three to four times current levels.
Achieving energy efficiency and renewable power generation of this
magnitude will require major improvements in our existing building stock.
Buildings consume about 40 percent of all U.S. energy.

3
Neighborhood Energy Savers – Madison Pilot

Of the building sector, residential buildings are particularly challenging. An

extensive Vermont Study surveying energy efficiency campaigns to date
showed that generally 0.1% of the population in a target region would take
on energy efficiency improvements. Commercial buildings are fewer in
number and incentives to reduce energy costs are directed by profit motives.
Energy consumption in the commercial sector is decreasing while residential
use continues to increase. Reducing fossil fuel consumption in the residential
sector will require influencing decisions and behaviors of many millions. The
residential sector consumes 21 percent of total U.S. energy (US DOE) and
generates 17 percent of U.S. greenhouse gases (US EPA). Achieving
Wisconsin and carbon emission goals will not be possible without significant
reductions in the residential sector.

The opportunity to improve building energy efficiency is great, particularly in

older buildings and homes. A home meeting Energy Star standards can
reduce energy consumption by 40%.

Figure 1

Source: Home Energy Calculator (sponsored by US DOE, EPA, HUD, the California Air
Resources Board, the California Energy Commission's Public Interest Energy
Research (PIER) program, and Touchstone Electric Cooperatives.)

BARRIERS
Many property owners make investments to improve their home energy
performance. Current levels of investments, however, are insufficient to meet
Wisconsin’s carbon reduction goals. Residents face a number of barriers to
reducing fossil fuel energy consumption.

Joel Rogers, UW-Madison, Center on Wisconsin Strategies (C0WS) identifies

the following barriers to property owner investments in energy efficiencies.
This proposal groups them into categories of informational/behavioral,
financial, and transactional.

Informational/Behavioral
 Poor information (on net savings from efficiency investments, and
trustworthy people to do the work involved);
Neighborhood Energy Savers – Madison Pilot

 Risk aversion and general skepticism (people are much more sensitive
to losses than gains, especially if gains require the cooperation of other
people to be realized);
 Lack of interest, or competing alternative uses of capital (if you were
given $1,000 tomorrow, would you first spend it on an energy retrofit?).

Financial
 Lack of capital or access to capital (capital markets for building
efficiency are not well developed)
 Split incentives (you pay the energy bills but don’t own the property, or
vice versa);
 Limited tenancy or ownership (why invest in your home or other
property if you may be leaving or selling before you get your money
back?);

Transactional
 Fear of disruption (who wants somebody tromping through her office or
home?);
 Disaggregation (highly dispersed potential energy savings, each with
negotiation costs on capture, rather than a single big opportunity);

Neighborhood Energy Savers is

designed to overcome
informational/behavioral, financial
and transactional barriers to
reducing fossil fuel consumption
and thereby generate local
investments, savings, jobs and
community capacity to address
broader sustainability goals.

Information/Behavioral
Barriers
Consumers lack information about
potential savings and community
and environmental benefits of
reducing fossil fuel consumption.
Given the carbon reduction
needed, informational and technical approaches alone, however, will not be
sufficient. Without behavioral changes, energy efficiencies can result in
“recapture,” whereby consumers increase consumption and maintain
spending levels. Inefficient patterns of behavior represent a large, untapped
reserve that could (according to several estimates) potentially reduce current
levels of energy consumption by 20 , and do so in ways that save money
(Gardner and Stern, 2008, Laitner et. al. 2009).

The Governor’s Task Force on Global Warming identified that: “Customer

participation is the largest barrier. To be more effective, more innovative in
Neighborhood Energy Savers – Madison Pilot

investing in energy efficiency, using a best practices approach and an

increased level of customer education and outreach, as well as an integrated
customer value approach is appropriate. “

The pioneering research and writing of Doug McKenzie-Mohr in Community-

Based Social Marketing (CBSM) has demonstrated that information alone is
insufficient to change behaviors. Numerous studies show that knowledge and
understanding alone do not significantly change behaviors. Commitments,
prompts, norms, effective communication and incentives can be combined to
generate more sustainable behaviors including energy conservation and
renewable energy adoption.

NES will work with existing community-based organizations or interested

neighborhood leaders to:
 Set goals for number of homes receiving energy services and fossil fuel
reduction.
 Help identify and employ social marketing approaches to community
outreach and education. 1
 Recruit volunteers to conduct basic level energy assessments, or House
Calls, and to help market the program, participate in support groups
and assist with information gathering
 Organize support groups and ongoing community meetings to maintain
project momentum and focus.
 Assist with identification of additional sustainability goals.

Financial Barriers
Upfront costs, split incentives and limited
tenancy prevent investments in energy savings.
What is needed to reduce or eliminate these
barriers is access to financing that is tied to the
property, and debt service payments that are
less than energy savings. Wisconsin Partners for
Sustainability program, Tri-Local Returns, will
partner with Wisconsin Business Development
Finance Corp (WBD) and Wisconsin Energy
Conservation Corporation (WECC)/Energy
Finance Solutions (EFS) other non profits and community banks and credit
unions, to establish financing mechanisms that achieve these objectives. The
financing mechanisms will include:

1
Green@Home, a program of Acterra in Palo Alto, CA identifies the following community-
based social marketing strategies:
• Easy steps
• Written commitment to change
• Baseline measurement and measurable results
• Support group for follow-up
• Visible prompts for new behaviors
• Public recognition for accomplishments
• Change norms through visible participation
Neighborhood Energy Savers – Madison Pilot

 A credit enhancement investment fund operated by WDB that leverages

private capital for energy improvement loans provided by lenders. The
credit enhancements and partnerships lower risk and rates and enables
longer terms and lower debt service.
 Loan origination and servicing provided by EFS or equivalent.
 Loan origination education and support NES.
 A municipal billing option for increased consumer benefits and barrier
removal such as tying the loan to the house and not the homeowner.
 Lending amounts up to $50,000 or more with approval.
 Portable loan products to address removable investments.
 Broad list of eligible items to include Energy Efficiency and Renewable
Energy investments.

The lending consortium is called Wisconsin Green Loans.

Transactional Barriers
The energy and knowledge required to seek and obtain qualified auditing and
contractual services present significant barriers to owners and tenants. NES
will reduce these barriers first with volunteer help and then with an energy
specialist. Volunteers (Energy Advocate 1) who conduct House Calls will
provide basic information to residents about energy saving potentials and
they will install immediate energy saving devices such as compact florescent
bulbs and faucet aerators. They will explain the next steps, which can include
a Home Performance Test through Focus on Energy’s Energy Star program,
or immediate actions such as installing attic insulation or air sealing.
Volunteers will inform residents about opportunities to participate in local
support groups to share and network about energy saving experiences and
opportunities.

Following the House Call, the Energy

Advocate 2) will contact residents to discuss
future options. The EA 2 will assist interested
residents with obtaining Home Performance
Tests (HPTs), soliciting bids for contractual
services, obtaining financing and applying for
government grants, rebates and tax credits.
The EA 2 provides the support services to
reduce or eliminate transactional barriers.

The EA2 and others will organize and bundle

homeowners retrofit projects where possible
with volunteer participants. This could
include for example insulation projects or
solar PV systems.

The NES activities described above are

consistent with recommended actions for the
Neighborhood Energy Savers – Madison Pilot

ECEE program in Wisconsin’s Strategy for Reducing Global Warming. The

recommended actions include:
 Create programs and pursue initiatives that will increase awareness,
understanding and participation through public campaigns, education,
and outreach. Such efforts to affect customer behavior are essential and
valuable elements in the overall ECEE Program and should be
implemented as soon as possible.
 Create programs of recognition and incentives for the most effective
results.
 Create a public scorecard of achievement for the state, by sector or by
utility or other geographic division or affinity group that is readily
accessible by the public.

Neighborhood Energy Savers: A SUSTAINABLE MODEL

Overcoming barriers to residential energy savings requires significant and
sustained efforts in education, motivation and assistance (financial,
contractual). A number of efforts to reduce barriers are underway or planned.
The Focus on Energy’s pilot program in Brillion, Wisconsin, the Center on
Wisconsin Strategy (COWS) Milwaukee Me2 program, or the Green@Home
program in Palo Alto are just a few examples. The key challenge that all such
efforts face is how to create a sustainable model: one that can be cost
effectively implemented at large scale.

Tri Local Returns developed NES to sustain itself by

capturing revenue from the value created by generating
new customers and investments in energy audits,
conservation and renewable energy. New customers mean
increased business for auditors, lenders and contractors.
NES will partner with these entities to generate business
and, in turn, earn a commission. NES will be a valuable
partner to the contractors, initial interest from contractors
is positive.

Additional opportunities for revenue to sustain operations come from sale of

energy products and solicitation of donations to a not-for-profit organization.
NES has an opportunity to partner with Energy Federation Incorporated (EFI)
who offers high quality energy products with a complete online sales
operation with warehouses in Wisconsin. http://www.energyfederation.org/
Neighborhood Energy Savers – Madison Pilot

WiscPSA’s program Tri Local Returns seek to launch the pilot NES program in
2010 and achieve financial break-even by the end of year 3 with the
following schedule.

Year 1 – Pilot Year 2 Year 3

Neighborhoods 6 11 22
Households 6,000 15,875 34,533
House Calls 1125 3,342 7,415
Energy Retrofits 141 527 1,315
Revenue $143,719 $625,835 $1,530,402
Expenses $266,531 $600,889 $1,094,111
Net Income ($122,812) ($24,946) $436,291

Achieving these outputs will generate the following outcomes:

Investments: $16,752.803
Kilowatts saved: 9,161,349
Therms saved: 284,060
Carbon (tons) reduced: 12,500
Energy savings: $1,927,961

Under this model, after three years, NES will have generated energy retrofits
in about 12 percent of the households in a neighborhood. This will be a
significant increase over the current rate of about one tenth to three tenths
of one percent.

The goal is to expand the program to serve the eight-county Madison region
and other regions of Wisconsin. 8-County Capital Region: Columbia – Dane –
Dodge – Green – Iowa – Jefferson – Rock – Sauk

NES Partners include:

 Madison Gas & Electric (MG&E) - information
sharing around energy conservation and
weatherization to be incorporated into NES
Tier 1 Energy Advocates training as part of
MG&E’s education and outreach to its
customers; also technical assistance with
training manual adoption from a California
based Green@Home manual
 Time Bank-reimbursement of volunteer time.
 Other partners as needed to strengthen NES’s
coalition. For example, the City of Madison
Solar City program can provide free Solar
Assessments in Madison City limits and can assist
with supporting bundling activities
Neighborhood Energy Savers – Madison Pilot

TARGET MARKET
The pilot will target middle-income neighborhoods in Madison with significant
percentages of owner-occupied, single-family homes that were built before
1980. The rationale for this targeting are: 1) middle-income households feel
the cost of energy but do not qualify for income-based energy assistance
(such as LIHEAP); 2) owner-occupants pay their own bills and have direct
incentives to reduce energy costs; and 3) older homes are less energy-
efficient. Although NES will focus initial efforts on residents deemed most
likely to respond favorably to energy improvements, it will also develop and
test methods for assisting the broader residential market: rental, multi-
family, all-income levels, and newer homes (although they are better
insulated, they also tend to be larger and consume more electricity).

Following the pilot, NES will target the eight-county Madison region. The goal
is to ramp up the program to achieve significant market share of the region,
and achieve results consist with recommendations in the Governor’s Task
Force for Global Warming, over the following ten years.

EXTERNAL FACTORS
NES will operate within the
larger context of public
policies and other market
actors. Federal and state
policy and programs to
support energy efficiency
and renewable energy will
likely expand in the near
future. This is especially
true of federal programs
such as the Energy
Efficiency and Conservation
Block Grants (EECBG), and
the possible “cash for
caulkers” program. The
State of Wisconsin applied
for a Ramp up Grant for the middle class in the recent Department of Energy
Request for Proposals. If funded, the state would have funding available for
programs such as NES. The cash for caulkers program would stimulate
demand for energy retrofits by offering a 50 percent rebate, up to $12,000,
for energy retrofits. These programs will provide a much-needed boost to
energy efficiency. They may also result in near-term shortages of labor for
energy improvements.

Additional actors in the market place include existing programs and

businesses. Existing programs include Project Home, COWS and Focus on
Energy. Project Home serves households that meet federal income guidelines
(e.g. income less than $35,000 for family of four). These households
Neighborhood Energy Savers – Madison Pilot

represent 36 percent of the total households in the eight-county Madison

region. The remaining 64 percent of households, which generally consume
more energy per unit, remain underserved.

Focus on Energy is running a pilot, community-based program in Brillion, WI

to use community outreach, free Home Performance Audits and utility rate
adjustments to generate energy efficiency investments and savings. The
Brillion pilot will generate good information about how to operate
community-based energy programs effectively. Focus on Energy through the
Wisconsin Energy Conservation Corporation, operates Home Performance
with Energy Star program, which certifies Home Performance professionals,
provides rebates for energy improvements and assists in other ways
including education and financing. NES will partner with Focus’ Home
Performance with Energy Star program by generating Home Performance
Audit referrals and educating homeowners regarding their eligibility for
rebates.

COWS operates the Milwaukee Me2 program to generate energy savings and
jobs through community-based approaches. COWS developed a model for an
“energy efficiency (E2) coordinating entity” to act as an intermediary to
stimulate and manage the flow of money and work between customers and
providers (lenders and contractors). 2 The NES model is similar to COWS
approach in that, through partnerships with Tri Local Returns, serves as an
intermediary to facilitate demand and supply for energy improvements.

These programs compliment NES efforts. Given that the current rate of
energy retrofit is less than 0.05% and the need for acceleration is great,
there is a need for a variety of efforts and approaches. The NES model is also
unique in that it seeks to create a sustainable financing mechanism to
sustain outreach and consumer energy assistance. Given the large volume of
buildings and investment required to reach fossil fuel reduction goals, a
sustainable financing mechanism is needed.

Pilot implementation steps

The NES pilot will include the following activities.

Hire Staff
Tri Local Returns will hire the Neighborhood Development Director, Energy
Advocate 2, Program Coordinator and Office Operations Manager. Positions
will be approximately 50 percent time for pilot.

Set up Organizational Systems

Staff will set up administrative, accounting and record keeping systems in
relationship with WiscPSA, the fiscal sponsor.

Prepare Materials
2
Seizing the Opportunity (for Climate, Jobs and Equity) in Building Energy Efficiency,
Rogers, Joel, December 2007.
Neighborhood Energy Savers – Madison Pilot

Staff will prepare marketing materials, a training program and modify an

existing manual for Energy Advocate volunteers, and House Call protocols
and forms.

Market Program
Staff will promote NES to Madison neighborhoods. Promotion will focus on
phone calls, emails and meetings with interested neighborhood and
organizational leaders and groups. Promotional materials will emphasize
benefits of saving energy, reducing carbon emissions and building
organizational capacity.

Select
Neighborhood(s)
NES pilot is based on
servicing an area or
areas with a total of
approximately 1,000
households. Madison 90
plus neighborhoods
range in size from a few
hundred to more than
1,000 households.
Selection criteria will
include demographics,
housing unit
characteristics and
degree of interest and
organizational capacity.

Establish
Neighborhood
Program
Staff will meet with
local leaders and
residents to review
neighborhood baseline
energy consumption
and carbon emission
data, and to establish
reduction goals.
Reduction goals will be
translated into numbers
of households that
make energy
improvements, receive
Home Performance
Tests, and receive
Neighborhood Energy Savers – Madison Pilot

House Call energy audits. The Neighborhood Coordinator will work with local
group to design strategies for outreach and promotion that employ proven
methods of community-based social marketing.

NES will help identify the number of volunteer hours required to achieve the
goals and set volunteer recruitment goals. Neighborhood meetings will be
promoted to the general public and held in locations and times convenient to
the most residents. Meeting formats will be informal, such as potlucks, to
invite participation.

Recruit and Train Volunteers

The Neighborhood Development Director will work
with local leaders and groups to recruit volunteers.
Local participants will identify sources of volunteers
and assist with making volunteer requests. NES will
provide marketing materials and explain program
operations and benefits to potential volunteers.
Selected volunteers will receive background checks to
prevent security risks.

The Energy Advocate 2

will conduct one or more
House Call trainings for
volunteers. Training will
last approximately 8-12
hours and include
program descriptions,
home energy
consumption and House
Call items described
below. 3

Sign up Residents and

Schedule House Calls
The Neighborhood Development Director will work with local residents to
market NES to local homeowners. Marketing can include phone calls,
mailings, local media, emails, websites and door-to-door conversations.
Residents who express interest will receive phone calls from NES. Staff will
schedule House Calls for residents who sign up and prepare energy reports
based on historical energy consumption (for residents who authorize release
of such information).

3
The Green@Home House Call Training Manual will serve as resource.
Neighborhood Energy Savers – Madison Pilot

Conduct House Calls

Volunteers will conduct two to two-and-a-half-hour House Call energy audits.
The House Calls will include:
 Introduction and review of NES and House Call activities.
 Assessment of electrical appliances.
 Assessment of furnace and home weatherization.
 Installation of energy saving items such as CFL bulbs, low-flow
showerheads, faucet aerators, power strips, and adjustments to
inflation of car tires.
 Discussion of assessment results, energy habits, home energy report
and opportunities for energy savings through HPT and home and
appliance improvements.

Provide Follow-up Energy Assistance

The Energy Advocate and other staff will
assist residents following House Calls to
pursue options for reducing fossil fuel
energy consumption including:
 Immediate actions – such as
appliance replacement, attic
insulation and air sealing, renewable
energy investments.
 Home Performance Tests – what
to expect, how program works, interacting with HP professionals,
scheduling HPTs where appropriate.
 Contractor assistance – draft bid specifications, solicit and review
bids, bundle multiple projects where appropriate, and contract for
energy improvements where appropriate.
 Financing – review loan options, complete and submit loan
applications.

Assist with Ongoing

Sustainability
Organizing
Neighborhoods that
organize to save energy
and reduce carbon
emissions will also
provide fertile ground for
other sustainability
initiatives. Taking action
and seeing results in
home energy
conservation can
motivate residents to see
the potential for
achieving broader
Neighborhood Energy Savers – Madison Pilot

sustainability goals. For example, neighborhoods may seek to reduce

automobile use, increase transit use, increase storm water filtration, increase
job training, increase services to youth and seniors or reduce indicators of
poverty.

The Neighborhood Development

Director will work with local groups
to establish additional sustainability
goals and initiatives.

Resources and financial support for

these broader sustainability goals
can be aided by Tri Local Returns
Community Carbon Fund which is a
separate pilot proposal that
integrates with the NES program.
CCF taps into multiple revenue
streams creating a neighborhood
fund which is accessible to the
neighborhood through aggregating or
bundling of their collective carbon
savings.

Reporting and Evaluation

NES staff will compile and report output and
outcome data including:
 Neighborhood engagement – numbers
of meetings and participants, numbers
and hours of volunteer work, numbers
of House Calls, change in local
organizational capacity.
 Energy Improvements – during House
Calls, Home Performance Audits, and
follow-up improvements.
 Local investments – dollar amount of
energy improvements.
 Energy savings
 Carbon reductions

Data will be compared to control

neighborhoods to measure program impacts. Staff will prepare
recommendations for program improvements and summary information for
use by other similar programs. Staff will prepare plans for ramping up NES
program to achieve significant fossil fuel reductions in residential sector over
the following ten years.
Neighborhood Energy Savers – Madison Pilot

Workforce Development and labor standards

There are a number of current public policy initiatives focusing on creation of
green jobs and green job training. Programs such as NES, that stimulate
demand for energy retrofit investment and labor, are logical partners for
green job training efforts.

Madison Urban League will be ramping up a workforce energy services training program
which will offer support and training services to unemployed and underemployed
workers. NES can serve as an employer with the Energy Advocate 2 position as a high
level position in an Apprenticeship career ladder.

Apprenticeship Services
Individuals in Wisconsin will have an opportunity to participate in registered
apprenticeship programs and, upon completion, will receive a nationally recognized
completion certificate that confirms their status as a journey worker in the trade. It
mostly a matter of moving applicants into a support and placement structure with
employer sponsors which is the role of Madison Urban League and others. The SAGE
grant is unique to apprenticeship programs in that it has 2 million dollars available for
directly reimbursing the training and its associated costs for green economy jobs. SAGE
funds will be allocated to the Workforce Development boards. The South Central
Wisconsin Workforce Development Board would be involved in the SAGE program.

The Weatherization Technician

Apprenticeship provides a perfect
structure to upgrade current training
components to standardize the levels
of competency required to master the
occupation and to provide
certifications and journey-level
credentials for existing and new
weatherization workers. SAGE will
be targeting this position. NES will
encourage its contractor partners to
participate as apprentice sponsors.

The Wisconsin Laborers' Union

will be offering LIUNA's 3rd party
credentialed 80 hour
weatherization technician/ installer curriculum and the development of a further
construction career pathway through the Laborers' apprenticeship program.
WLU is in discussion with SAGE regarding their participation. WLU has indicated
if need be they have the capacity to in kind the trainings to their members and
WLU will welcome new members. WLU has also indicated a willingness to offer
Neighborhood Energy Savers – Madison Pilot

trainings to non members on a contractual basis. LIUNA has an approved

training curriculum for utilization with the pending Home Star rebate program

Solar Installers Currently there are over 400 students enrolled in MATC’s CERET
curriculum, many of them unemployed displaced workers. MATC will be working with
the SAGE Apprenticeship program. NES will encourage its solar contractor partners to
participate as apprentice sponsors.

NES will be working in partnership with the MADISUN program to offer homeowners
the opportunity to receive a solar assessment. NES will coordinate across the
neighborhoods and City the opportunity for homeowners to participate in a solar
purchasing aggregation structure.

HVAC/Sheet Metal Technician Replacement of HVAC systems is a key upgrade in

energy retrofits. Due to the roll out of NES, the Ramp up funds, and likely passage of the
Home Star program there will be significant uptick on sales of HVAC equipment and the
need for trained technicians. Technicians who are certified by Building Performance
Institute (BPI) who understand whole house performance will be mandatory. The skill
level and learning path is long term for this position and enrollment in MATC’s
apprenticeship program will be the likely step for applicants. NES will encourage its
HVAC contractors to participate as apprentice sponsors.

Raising the bar on wage and

benefits

Weatherization work is difficult physical

work with low pay. It is subject to high
turnover and rarely offers benefits. In
order to raise the bar NES will educate
homeowners on the importance of
skilled labor in achieving performance
goals for their home. Bundling of jobs
will create a potential for including labor
standards in the bid preferences.
Neighborhood Energy Savers – Madison Pilot

YEAR
ACTIVITY 1 2 3 4 5 6 7 8 9 10 11 12
Hire Staff
Set up Organizational Systems
Establish Office, order supplies and equipment
Develop Training Program for volunteers
Write Energy Advocate Training Manual
Market program
Prepare House Call materials (forms, protocols)
Select neighborhood(s)
Meet with leadership group
Establish energy saving goals
Hold neighborhood meeting
Recruit Volunteers for 1st training
Hold Energy Advocate training
Establish Financial partnerships
Develop guarantee fund and raise capital for fund
Application forms and protocol for loan processing
Develop Website and outreach materials
Procure materials and prepare House Call kits
Test House Calls
Conduct House Calls
Develop contractor relations
Schedule Home Performance Tests
Work with residents to obtain financing
Work with residents to select and hire contractors
Gather, compile, report energy saving information
Conduct program evaluation

Page 18
Neighborhood Energy Savers – Madison Pilot

Assess job training potential

Establish Year 2 and 3 plans

Page 19
PERSONNEL FUNCTIONS AND KEY STAFF

Neighborhood Development Director –

 Develop and manage a database of organizations and individuals
 Prepare outreach materials (print and electronic)
 Manage media relations
 Recruit local organizations and individuals
 Conduct meetings for organizations and networks
 Communicate and coordinate with local groups and individuals on an on-
going basis
 Provide follow-up support to local initiatives to generate energy savings.
 Assist groups with ongoing sustainability organizing and neighborhood
development

Energy Advocate 2 – Larry Walker, may provide initial tasks. Permanent

Energy Advocate 2 to be hired.
The Home Energy Specialist will train Energy Advocate volunteers, manage
House Calls and provide contractor services. This position will
 Train Energy Advocates
 Manage House Calls
 Track energy savings
 Train Energy Advocates
 Solar Energy Services Contractor
 Communicate to owners that receive Home Performance Audits the
results of the audit and discuss next steps.
 Prepare bids for energy improvement services based on HPT outcomes.
 Maintain communications with Home Performance Auditors and home
improvement contractors.
 Solicit and evaluate bids from contractors.
 Assist owners to evaluate bids.
 Hire contractors when appropriate.
 Monitor bid compliance.

Larry Walker
After many years in the software engineering and information technology
businesses, Larry pursued work in the renewable energy field, specifically in
the areas of solar energy, energy efficiency. Larry has a private consulting
business Walker Energy Systems offering: Energy Audits, Solar Assessments,
Buyer’s Agent Services, Energy Strategy Consulting. Larry is the MadiSun
solar agent offering solar consultations to Madison residents on behalf of the
City of Madison.
Neighborhood Energy Savers – Madison Pilot

Office Operations Manager – TO BE IDENTIFIED

The Office Manager will:
 Manage office support volunteers
 Assist with management and coordination of neighborhood volunteers.
 Schedule House Calls
 Manage House call “Energy Advocate Supplies”
 Manage record-keeping
 Order supplies
 Coordinate sales of energy efficiency products.
 Assist Homeowners with finance questions.
 Assist with finance, record keeping, HR functions.

Program Coordinator – Chuck Learned

The Program Coordinator position:
 Establish and maintain partnerships with municipalities
 Establish and maintain partnerships with financial services partners.
 Work with other NES staff to establish ongoing budgets.
 Assist with communication and coordination between NES and Tri Local
Returns other programs to build support and synergy.
 Assist with new program or product development, staff recruitment
and hiring.
 Assist with program evaluation and board communications.

Chuck Learned
Chuck brings over a decade of experience as a Green Builder and has been
involved in renewable energy research and other green innovations. He has 9
years in community development as well 15 years of owning and managing a
business, developing and manufacturing products and providing training
services that serve schools and community agencies. Chuck currently is the
Director for Tri Local Returns an upstart triple bottom line economic
development enterprise.

Support Functions
 Web Services – to be identified
 Accounting, payroll, liability – Tri-Local Returns

Page 21
Neighborhood Energy Savers – Madison Pilot

FUNDING REQUEST
The total modeled cost to establish a financially sustainable model for deep
energy savings and carbon reductions in the residential and neighborhood
business sector is $300,000. This assumes a start up team working in
partnership with one or more municipalities. This would likely focus on one
county such as Dane County. WiscPSA modeling suggests that funding needs
for year 1 and 2 would be:

Year 1 $170,000
Year 2 $130,000

This amount assumes the revenue streams are going to perform as modeled
and the production quotas are being met. These are untested assumptions.
Given the unknown performance a buffer needs to be built in. This is more
conservative approach and yet allows and encourages collaboration across
municipalities and provides a model for expansion into other counties.

The cost to operate in a neighborhood over several years will be a onetime

start up of $50,000. We are proposing to cover half of that through our
revenue streams leaving a $25,000 start up requirement per
neighborhood. If more than 17 neighborhoods are involved in the initial
start up agreement then the cost per neighborhood comes down as after 17
neighborhoods the project caries the full cost after 17. This assumes
alignment with our modeled percentage of low income residents. If the
numbers of low income qualifiers are over 20% then the cost per
neighborhood needs to be higher as the revenue streams proportionally
disappear with the rising percentage.

Funding for 17 Neighborhoods of 1000 residences = $850,000

Revenue Match of 50% by Neighborhood Energy Savers of $425,000
Net required funding of $425,000

Incentive for collaboration across Municipalities: If for example 6

municipalities committed to work with NES and 50 neighborhoods were to be
served then the net cost per neighborhood would be $425,000/50 = $8,500

Revenue Sources for financial Sustainability

The pilot will enable NES to test the potential to generate projected outputs
and outcomes (see following Logic Model). NES plans to break-even and
achieve sustainability by the end of year three by capturing the following
sources of revenue:

Home Performance Test Referral Fees

Focus on Energy provides $75 referral fee for each resident referred by NES
who contracts for an Home Performance Audit from a certified professional.

Home Performance Test Revenue Capture

House Call volunteers will accomplish some of the simpler tasks normally

Page 22
Neighborhood Energy Savers – Madison Pilot

performed by Home Performance professionals.4 Results of the House Call,

such as interview with homeowners and assessment of appliances, will
reduce the time required for HPTs. NES will partner with HP professionals to
generate House Call customers that require fewer hours in exchange for
$100 of the normal $400 fee. The EA 2 will be covering the report results
with the homeowner.

Lender Sponsorship Success Fees

Most residents who retrofit their home to reduce fossil fuel consumption will
require a loan. NES will be a significant stimulus to the financing of loans.
NES will request a sponsorship agreement with its lending partners of a one
time 2% fee up to $12,000, 1.5% $12,000-$25,000 and 1.25% greater than
$25,000

Energy contractor Referral Fees

NES will partner with energy retrofit contractors to generate customers in
exchange for a 5% fee.

Energy General Contractor Service Fees

When NES provides general contractor services by the Energy Advocate 2
position to the homeowner a fee of 10-12% will be assessed. This fee can be
added to the total project cost.

Energy efficiency Product Line

An offering of specialty energy efficiency related
equipment and supplies that will facilitate resident
savings will be sold and available for installation (if
needed) and financing. Literature, website and
store front office combination is being considered
to display products. Pilot will develop product line.
Revenues of any significance from product sales
are projected to begin year 2. Revenue sharing
with each neighborhoods community carbon fund
will be employed.

Donations
Some residents who realize benefit from participation in NES may be inclined
to support the efforts through a donation. NES will be offering giveaways
with installation during house visit.

Neighborhood Energy Savers projections for production, revenue, net income

and cash flow and outcomes are shown on the following page.

4
Based on conversation with HP professional.

Page 23
Neighborhood Energy Savers – Madison Pilot

Year
PRODUCTION 1 2 3 Total
Households 6,000 15,875 34,533 56,408
House Calls 1,125 3,342 7,415 11,882
HPTs 281 964 2,324 3,569
Energy Improvements 141 527 1,315 1,982
Loans Processed 105 395 986 1,487
Projects bid for General Contract
Services 56 263 658 977
Investments in Energy Improvements $1,406,250 $5,265,469 $13,150,298 $19,882,017
         

REVENUE 1 2 3
HPT Referral fees $21,094 $72,264 $174,320
 
 
Loan fees $16,875 $67,404 $173,600
 
HPTs $21,094 $72,264 $174,320
       
 
General Contractor fees $49,500 $244,056 $636,533
 
Contractor referral fees $28,125 $137,262 $289,333
 
Product sales/commissions $0 $11,698 $35,952
 
Total retail sponsorships $0 $0 $0
 
Donations $7,031 $20,889 $46,343
$1,530,40
TOTAL REVENUE $143,719 $625,835 2

FINANCIAL PROJECTIONS 1 2 3
Grant/Investment Funds $170,000 $130,000  
   
$1,530,40
Revenue $143,719 $755,835 2
Expenses  
Salary & Wages $170,660 $393,097 $761,691
Other Expenses $95,871 $207,792 $332,420
$1,094,11
Total Expenses $266,531 $600,889 1
   
EBITDA $47,184 $154,946 $436,291
Depreciation $1,575 $1,575 $1,575
Net Income (Loss) $45,609 $115,029 $434,716
   
Cumulative Free Cash Flow $46,630 $71,531 $86,764

Page 24
Neighborhood Energy Savers – Madison Pilot

ENERGY & CARBON

REDUCTIONS       Total
     
Consumption Reductions    
Natural Gas (thousand cf) 9,180 29,918 69,946 109,043
Electricity (kWh) 896,484 2,921,643 6,830,627 10,648,754
     
Expenditure Reductions    
Natural Gas $70,821 $234,603 $553,160 $858,583
Electricity $116,543 $379,814 $887,982 $1,384,338
$1,441,14
  $187,364 $614,416 1 $2,242,921
     
Carbon reductions (tons) 1,223 3,986 9,320 14,529

ASSUMPTIONS
Year
PRODUCTION ASSUMPTIONS 1 2 3
Average households per neighborhood 1000
Number of neighborhood starts 6 11 22
Percent don't care/already invested 25% 25% 25%
Percent signing up for House Calls 25% 35% 35%
Percent signing up for HPTs 25% 35% 50%
Percent investing in energy improvements 50% 60% 65%
 
       
REVENUE ASSUMPTIONS 1 2 3
Referral fee $75 $75 $75
Average $$ of Energy Improvement $10,000 $10,000 $10,000
% Energy Improvements using HS loan service 75% 75% 75%
HS loan fee 2% 2% 2%
Percent homes using NES HPT services 75% 75% 75%
HPT agency charge $100 $100 $100
% loan revenue realized in year loans are made 80% 80% 80%
% Energy Improvements using HS gen.
contractor 25% 50% 50%
HS General Contractor fee 11% 11% 11%
% Contractor revenue realized in year of
contracts 80% 80% 80%
% Energy Improvments capturing referral fee 60% 50% 50%
HS referral fee 5% 5% 5%
% of homes that make product purchase 0% 25% 25%
Average product purchase $100 $100 $100
Total retail sponsorships $0 $0 $0
% House Call homes that make donation 25% 25% 25%
Average donation size $25 $25 $25
       

Page 25
Neighborhood Energy Savers – Madison Pilot

STAFFING EXPENSE ASSUMPTIONS  

Base Professional Salary $50,000
   
Annual percent increase 3%
   
Benefits as % of wages 40%
Annual operating expense increase 25%

START-UP FUNDING NEEDED $170,000 $130,000

ENERGY AND CARBON ASSUMPTIONS  

Average household electricity (kWh)
consumption 10000
Average household nat. gas (1000 cf)
consumption 102
(Source: ECW 211.1)
Average per kwh cost (MGE 9/09) $0.130
Average per therm cost (1/10) $0.915

Natural gas savings from house calls 5%

Electricity savings from house calls 5%
Natural gas savings from energy improvements 25%
Electricity savings from energy improvements 25%
Pounds of CO2 emitted per kWh 1.50
Pounds of CO2 emitted per cubic foot nat. gas 0.12

PROGRAM DESIGN AND EVALUATION: LOGIC MODEL

The Logic Model on the following page presents the Neighborhood Energy
Savers program. The model describes situations that create need for
program and shows the connection between inputs, outputs and outcomes
and how they are influenced by assumptions and external factors. It will be
used as an evaluation tool. UW Extension will provide assistance with
program evaluation. Evaluation will include comparison of outcomes from
pilot neighborhood to a control neighborhood.

Page 26
Neighborhood Energy Savers – Madison Pilot

Page 27