Retrofitting Holland

From Holland, Michigan (pop: 33,000):

A report detailing costs and projected energy savings for 25 houses in the pilot showed home improvement expenses averaging $14,087. Annual energy savings from those retrofits averaged $865, for a 32 percent energy savings.

Those savings don’t reach the potential 53 percent savings cited in the visionary Garforth report that was the basis of Holland’s Community Energy Plan. But that report also estimated home improvement costs averaging $28,000 for “deep energy retrofits.”

“So actually it’s a pretty good value,” City Manager Ryan Cotton told the council Wednesday night.

While this is a small pilot, there are a few lessons for the UK and elsewhere:

  • Experimentation: The goal of the pilot is to find a system for wide-scale home upgrades, which in Holland means up to 300 to 400 homes a year. This is clearly a problem that the UK is grappling with too. Schemes like ECO have been relatively successful, but the Green Deal has been, in the words of Secretary of State Ed Davey, “disappointing“. If we haven’t found the right solution yet, then international examples like Holland may be useful templates even if adjustments will need to be made to account for local differences.
  • Motivation: Participants in Holland selected from a menu of “good”, “better”, and “best” options. The pilot found that those choosing the “best” option seemed to be driven by civic responsibility, a belief that the upgrades were “the right thing to do.” Others believed that their homes needed significant efficiency improvements and they benefitted from the ability to finance the work over a longer time period. I find the civic motivation particularly interesting. I’ve seen retrofit schemes in Newcastle, Leeds, and Cambridge clearly linked to the local council but I’m not aware of any research to say whether this helps (or hinders) adoption.
  • Finance: In phase 2 of the project, the city is considering using an on-bill financing system.

    On-bill financing, allowed under a state law just passed in December, lets the city or Board of Public Works loan money for improvements and collect payments through utility billings. That solves some credit qualification issues and, given energy savings, lets homeowners pay off upgrade loans with similar or only slightly larger utility billings.

    It would be interesting to know what tenure arrangements are like in Holland. Home ownership rates for the US as a whole are 65% in urban area, versus 50% in the UK, which suggests more people would be willing to take on a long-term liability tied to their property.

  • Prizes: The city was partly motivated to run the project as part of the Georgetown University Energy Prize, “a multi-year, $5 million prize…to tap the imagination, creativity, and spirit of competition between communities across the country to develop sustainable energy-saving innovations”. I hadn’t heard of this prize before but it has participants from across the US. Wouldn’t it be great if there was something like this in the UK? The only example I can think of is Bristol being designated European Green Capital 2015.