Investing in the Future by Encouraging Energy Retrofit Decisions

Cities with aging building stocks and budgetary challenges often have a high number of buildings in need of energy efficiency upgrades. Inefficient residential buildings have a higher energy consumption and its associated negative, unintended environmental and social consequences. One such social consequence is that higher portions of a resident's income is spent on energy costs. This burden is proportionally higher for low-income residents, which raises the importance of addressing this issue. Energy retrofits can mitigate these consequences, but small municipal budgets and capacity hamper such efforts. The split incentive problem in the multi-family residential sector, where owners incur the costs but tenants primarily benefit from the energy savings, poses additional challenges to energy retrofit efforts. This study employs qualitative interviews to explore how municipalities and nongovernmental organizations (NGOs) in Cleveland, Ohio, Detroit and Grand Rapids, Michigan incorporate strategies that leverage neighbor and network peer influences into their approaches to energy efficiency. These cities all have aging building stocks that are the legacy of a history with greater manufacturing employment. Selected interview findings were used to develop the Neighbor-Influenced Energy Retrofit (NIER) agent-based model to further explore the potential of peer influences within networks and among neighbors to amplify the motivation of multi-family residential building owners to reduce energy consumption through retrofits. The following insights emerge from NIER model: small neighbor peer groups successfully motivate different types of building owners to retrofit when there are also large financial incentives. Large peer groups, including a district approach, can achieve large energy efficiency gains in the population of buildings, but may not motivate all building owner types. The combination of a district approach with an approach of bringing buildings up to code at the point of sale can achieve energy efficiency gains broadly across different types of building owners. Planning and policy recommendations are produced from the insights from the NIER model and the interview findings. These are qualitative recommendations that aim to provide new solutions to the challenges that has hampered energy efficiency efforts among multi-unit residential buildings in the selected cities.