Subsidized energy efficiency could curb renter costs

A University lab study could lead to subsidizing home winterization installation, passing savings onto renters and lowering overall energy consumption.

Tiffany Bui

Although insulation may not be the first thing on students’ minds when they look for an off-campus house, the City of Minneapolis has made affording insulation and other energy efficiency measures a priority. 

Using a method that has never been implemented in Minnesota, the City is hoping to lower energy bills by making energy-efficient home installations affordable to all residents. A parallel effort at the University of Minnesota Energy Transition Lab is set to begin research on the financing model’s feasibility for the state by the end of November. 

The method, called inclusive financing, will allow renters to make improvements that keep their houses warmer in the winter without high upfront installation costs. 

“We’ve seen this in other communities really be a game changer for who can access energy efficiency and local green energy,” said Timothy DenHerder-Thomas, board member of the local nonprofit Community Power, who has been working to get the model approved by the City.

Currently, only property owners are able to make energy efficiency improvements, with a small percentage actually following through after they’re deemed eligible for such measures, said DenHerder-Thomas. Landlords have little incentive to pay for the expensive installations since renters foot the cost of energy bills. 

“That’s not enough to get us to the climate goals that we have, [or] the energy affordability goals that we have,” said DenHerder-Thomas. 

Under inclusive financing, upfront installation costs are subsidized by a third party and eventually paid by the consumer through their energy bill. Participants will see lower utility costs as a result of the reduced energy consumption. 

“As long as they have a bill, and as long as they have paid that bill … students would be able to take advantage of this without taking out a personal loan,” said Kim Havey, director of sustainability at the City of Minneapolis. 

The Clean Energy Partnership board, a collaboration between the City, Xcel Energy and CenterPoint Energy, approved the measure to be included in their 2020 outline of clean energy initiatives on Thursday. 

The model has been adopted by utility companies in Kansas, Kentucky, North Carolina, Arkansas and California. Research hosted by the University Energy Transition Lab will evaluate the model’s financial feasibility in Minnesota. 

“[Students] need to know that the fastest, cheapest and cleanest way to reduce carbon emissions is with energy efficiency,” said Ellen Anderson, director of the University Energy Transition Lab. “It’s not the shiny object that renewable energy is, but it needs to be the beginning of any kind of energy solution.”

Although the City does not consider renewable energy measures like solar panels to be energy efficient, the study will explore the possibility of including them in the program. 

Areas around the University campus used, on average, about 15 percent more natural gas in 2017 than the rest of the city, according to CenterPoint Energy. 

Older homes that lack insulation can be costly to heat, said Bill Dane, a Student Legal Service lawyer. The densely-populated areas of Marcy-Holmes and Prospect Park are among the oldest neighborhoods in Minneapolis.

“It’ll vary a lot from property to property. In some of the large old houses, it’s not unusual to see heating bills that are going to exceed $200 or sometimes get near the $300 range for just that month,” Dane said. “Depending on how many people you’re dividing that among, it can be a real challenge to gather up those extra funds to pay it.”