Develop key strategies for marketing based on their experience with customers.

Media events, prominent news articles, celebrity endorsers, and even reality television shows and sponsorships may be some of the techniques necessary to raise awareness among the public.

Use existing fund for energy efficiency retrofits to support the marketing campaign.

Local governments developing municipal finance programs, state agency officials at the CEC and CPUC, and private and municipal utility leaders should dedicate existing energy efficiency funds to support a comprehensive marketing campaign.

Consider mandatory time-of-sale/rent energy disclosure to inform building owners about the energy needs of their buildings.

New owners, armed with information about a building’s energy use at the time of purchase, may be more motivated to consider retrofits to save on long-term energy costs.

Encourage, support, and subsidize the creation of Property Assessed Clean Energy (PACE) programs.

PACE programs work by allowing a government entity to provide the upfront capital for a building owner to invest in a retrofit. The government raises the money from the municipal or state bond market. The building owner then pays the government back via an increase to the semiannual property tax assessment.

Provide short-term financing to launch PACE programs across the state and make them self-sustaining.

Once PACE programs generate enough volume of activity, the program administrators can sell bonds to raise capital and make them self-sustaining. Until that point, however, they will need short-term capital to get started. State investment funds can bridge that gap.

Authorize the use of tax-exempt bonds for PACE programs and/or provide a federal guarantee to the bonds to reduce the costs of capital.

These steps will provide long-term stability for PACE programs by keeping the repayment rate low and thereby attracting more investors to the program.

Promote energy efficient mortgages (EEMs) and rehabilitation mortgages to potential customers.

EEMs and rehabilitation mortgages, through the federal Section 203(k) program, allow upfront retrofit costs to become part of the mortgage. These programs pack the financing for energy efficiency work as part of the single mortgage and allow borrowers to qualify for a larger loan amount to cover the costs.

Train mortgage lender representatives to educate home-buyers about the opportunity for EEMs and rehabilitation mortgages.

Many mortgage brokers in financial institutions are unaware of these programs. As a result, when homebuyers first meet with them to secure a loan for their building purchase, they fail to inform customers about them. Retrofit contracts and energy efficiency advocates should encourage financial institutions to undergo this internal training process.

Encourage federal lending institutions to promote EEMs and rehabilitation mortgages.

Federal agencies such as the United States Department of Housing and Urban Development, that oversee loans for low-income residents should ensure that EEMs and rehabilitation mortgages are widely available, promoted, and utilized. The Federal Housing Administration should also take similar steps to promote EEMs and rehabilitation mortgages for FHA-backed mortgages.

Expand on-bill financing for retrofits to residential customers.

“On-bill financing” programs allow electric utility customers to finance energy efficiency measures through their energy bills at low or no interest, with the upfront money provided by the utilities. In order to avoid consumer credit lending liabilities, utilities can work with financial institutions that already comply with these lending laws to provide the financing, with the utilities becoming the vehicle for delivering the payments.

Expand Mello-Roos financing programs to include retrofits.

Under California’s Mello-Roos law, any county, city, school district, or other special district can form a community facilities district (CFD) to finance public improvements and services within its jurisdiction. The CFD imposes a special tax lien on the properties within it. A CFD requires a two-thirds majority vote of residents living within the boundaries of the political jurisdiction.

Expand tax credits and deductions for building owners who undergo retrofits.

The federal and state governments should consider providing tax credits to homebuyers who undergo energy audits and retrofits on newly purchased homes. The federal government could also make the principal on a loan for energy efficiency improvements tax-deductible.

Offer rebates for homeowners who undergo retrofits.

The federal government can provide strong financial incentives through rebates to induce homeowners to undergo retrofits. The benefits include decreased energy costs for homeowners and increased economic activity from the employment boost to retrofit contractors.

Promote retrofit incentive packages to landlords or homeowners associations with significant common area energy usage.

In some jurisdictions, a large majority of landlords pay the energy bills for central water heating for the entire building. Because the landlords or homeowners associations are responsible for these bills, the split incentive problem does not apply. Retrofit program advocates and contractors could therefore encourage them to improve the energy performance of these common areas.

Encourage negotiated solutions between renters and landlords by developing negotiating templates and terms and facilitating the negotiations.

Advocates and contractors should target multifamily and multitenant buildings with significant cost-saving potential. Ultimately, the viability of these agreements depends on solid data about the likely energy savings that would occur. They also require standardization to save transaction costs and allow for larger-scale negotiation processes by similarly situated tenants and landlords to maximize returns from the investment of time and resources.

Consider legislating disclosure requirements for landlords.

If building owners had to report the energy consumption data of a building or unit to prospective tenants, renters would be more likely to choose energy efficient buildings. By responding to this demand, owners could increase their property values and rental rates. Retrofits would therefore make their properties more attractive to renters.

Consider requiring energy retrofits when buildings change tenants.

The Title 24 energy efficiency standards only apply to buildings built after 1978. With the large stock of housing built before 1978 – some of it multifamily or multitenant – policy-makers could require commercial and residential landlords to upgrade their properties to make them as energy efficient as post-1978 buildings.

Improve the retrofit process where possible.

Local government leaders should develop standardized permit procedures for retrofits. They should make permit applications and processes easy and affordable to minimize delays and costs to building owners.

Streamline the retrofit financing process where possible.

Retrofit contractors and nonprofit retrofit advocates should use existing trade associations and nonprofit groups to lobby financial institutions and state and local officials to ensure that the PACE financing process for retrofits is as streamlined and standardized as possible. In addition, when permits are required for retrofits, local governments should collapse these permits into the overall municipal financing package, where applicable, or streamline the approval process to minimize delays and cost to the consumer.

Provide advance approval for mortgage holders to enter into a PACE financing arrangement.

The PACE process in California requires commercial property owners to obtain an acknowledgement from the first mortgage lender that the mortgage holder’s participation in the PACE program will not violate any provisions of the mortgage agreement. Some lenders have offered PACE districts blanket approval to avoid case-by-case sign-offs. However, those lenders who have not yet given this advance approval should consider doing so in order to facilitate retrofit financing under this program.

Gather performance data on retrofit methods.

Collecting data on the retrofit methods chosen by building owners and the resulting energy cost-savings over time will provide better information for policy-makers and retrofit contractors to determine what methods are cost-effective and more accurate data for consumers about the likely energy savings from retrofits. It will also help building owners prioritize and select retrofit methods for their buildings.

Work together to perform regional housing stock assessments to standardize and target large-scale retrofit efforts.

Building owners across California should have easy access to data about the typical retrofit needs for their building’s age and type, as well as for their neighborhood and climate. The more standardized the retrofit recommendations, the easier for building owners to decide to begin the process. Policy-makers should therefore dedicate existing energy efficiency funds to finance grants for universities and nonprofits to perform an assessment of the housing stock in specific climate zones.

Develop a methodology to perform a regional assessment.

Nonprofits or university researchers should take the lead to develop a methodology to assess the general physical qualities of the regional housing stock, as well as typical energy usage and climate. Utility-provided data on energy use within these areas will be critical to making the data more accurate and accessible to researchers.

Use the mapping data to target the most energy-inefficient homes and regions.

The mapping data provided by these assessments will help policy-makers target the most cost-effective areas for retrofit programs. For example, state and local governments could focus retrofit incentives and financing programs on areas with older and inefficient homes in inland zones that have significant temperature fluctuations.

Develop a menu of standard recommended retrofit options for building owners.

The regional housing stock and performance data will help policy-makers develop a menu of standard recommended retrofit options for building owners in a given class of building types, ages, neighborhoods, and climate zones. In addition, the data could help policy-makers devise improved building codes to standardize the type of appliances, fixtures, and construction methods to make retrofits possible at a large scale.

Provide resources for building owners interested in retrofits.

Local and state governments, financial institutions, and retrofit contractors should partner to develop an informational database for building owners interested in retrofits. A “one-stop shopping” website, with information on financing options, qualified retrofit contractors, and the latest retrofit methods would help consumers navigate what can otherwise be a confusing and overwhelming process.

Agree upon a trade-based certification process.

While independent certification programs exist for retrofit contractors, such as the Building Performance Institute (BPI), there are no state or federally-approved certification programs for retrofit contractors. As a result, members of the public will have a difficult time determining who is a qualified retrofit contractor. Retrofit contractors must organize politically through their existing trade associations or groups like BPI to make these certification standards mandatory for licensed retrofit contractors.

Ensure that an independent government agency develops and enforces licensing standards for retrofits.

Once contractors and other stakeholders have agreed upon reasonable standards for licensing, policymakers must begin the process of making these standards mandatory and part of their retrofit financing or mandate programs.