The Obama administration expanded an energy efficiency program Tuesday to include apartment complexes, condominiums and other multifamily buildings, the latest White House move to bolster efficiency as Congress remains stuck on the issue.
The public-private program, the Better Buildings Challenge, is one of the many administration-level tools to which President Obama has resorted to advance energy-efficiency policies.
Obama vowed to expand the program in a June speech, adding that he would lean more on regulations to address carbon emissions that drive climate change. Buildings, which account for 40 percent of U.S. energy use and 75 percent of electricity consumption, are a focal point of the administration's climate agenda.
"Upgrading the energy efficiency of America’s buildings is one of the easiest ways to save money, reduce pollution and create jobs," Nancy Sutley, chairwoman of the White House Council on Environmental Quality, said Tuesday.
About one-quarter of U.S. households live in multifamily units. The list of more than 50 multifamily property owners that will participate in the Energy Department program includes the public housing authorities of major cities such as Atlanta, Baltimore and Philadelphia, smaller ones like that of Freeport, Ill., and a mix of private companies.
The expansion comes as Congress struggles to move on energy efficiency, which is generally viewed favorably by both Republicans and Democrats.
That legislation, sponsored by Sens. Jeanne Shaheen, D-N.H., and Rob Portman, R-Ohio, would establish voluntary efficiency building codes, offer workplace energy-efficiency training and encourage manufacturers to make efficiency upgrades. But its future is uncertain after getting yanked from the Senate floor in September.
The Better Buildings Challenge began in February 2011, originally targeting upgrades at industrial and commercial companies motivated by reducing energy consumption as a way to cut costs. It aims to make those buildings 20 percent more efficient by 2020, and the Energy Department said the more than 120 organizations that signed up are on track to meet those goals — saving roughly $58 million annually in energy costs.
The multifamily housing effort also will shoot for a 20-percent reduction in energy use within 10 years, the agency said. That will be accomplished through improvements such as more efficient lighting, rooftop solar installations and energy-efficient retrofits, the agency said.
But getting housing units on board with energy-efficiency investments is a different challenge than with manufacturers and industry, experts said.
The incentives for profit-seeking firms — large energy users concerned about their bottom lines — to invest in energy-efficient upgrades aren't the same as an apartment complex owner who would need to pass the costs of improvements on to renters.
That "split incentive" — in which the property owner must pay for the upgrades, but the tenant would reap all the benefits — is the biggest roadblock, Kate Johnson, a research analyst with the American Council for an Energy-Efficient Economy, wrote in a report this week.
Financing is also an issue, Johnson wrote, with the options for low-income housing units — which house people who spend a higher than normal amount of their disposable income on energy — being particularly scarce.
Low-cost "lending programs for energy-efficiency projects are not widely available," she said.
Kateri Callahan, president of the Alliance to Save Energy, agreed the financing environment isn't very developed for multifamily units. And the options that do exist are underused, she said.
One example are the federal stimulus-created Qualified Energy Conservation Bonds, which states can distribute to public residential buildings for making efficiency upgrades. As of June, 28 states had awarded $775 million out of a possible $3.2 billion.
Still, she said programs like the Better Buildings Challenge, which rely on the federal government's ability to bring public- and private-sector players together and to offer technical assistance, could encourage greater adoption and commercialization — eventually making capital costs less of a concern.
Making information more accessible is one of the keys to the program, Callahan said, suggesting that the benefits for upgrading multifamily units would become more apparent to property owners.
"There has to be the value proposition and they have to be educated as to what that value proposition is," she said.
Atlanta is already seeing some of those gains, Aaron Bastian, the city's sustainability communications and project manager, said in a recent editorial on the blog TriplePundit.
"We’re seeing a positive trend with property owners investing in their existing buildings to increase efficiency and marketability," he said.