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Holland’s Bright Energy Plan Starts to Roll

Citizen-powered task forces launch initial home efficiency projects

Clean Energy | January 26, 2015 | By Jim Dulzo

About the Author

Jim Dulzo is the Michigan Land Use Institute’s senior energy policy adviser. Reach him at jimdulzo@mlui.org.

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*This is part 1 of a three-part update on Holland's ongoing Community Energy Plan. Read part 2 here, and part 3 here

Waving a goodie bag stuffed with energy efficiency promotional items, Holland City Councilman Brian Burch fired up a rally about winning the $5 million Georgetown Energy Prize for the city, urging the crowd to give bags to lots of their neighbors.

HOLLAND, Mich.—From a festive, indoor pep rally aimed at winning a $5 million energy prize, to recent Holland-prompted state legislation intent on boosting the efficiency and value of every home in town—this city’s forward-looking Community Energy Plan is steadily gaining momentum and public support for transforming an old Lake Michigan port city into a world-class clean energy champion.

The CEP calls for cutting the city’s per capita energy use and greenhouse gas emissions by more than half over the next 40 years. Holland’s city council adopted the plan in 2012, a year after local officials and energy consultant Garforth International settled on the most ambitious of four suggested “scenarios.”

Proponents said that such a project would attract innovative businesses and young people eager to work for them; protect residents and businesses from volatile energy prices; spark a steady stream of high-skill efficiency service jobs; and keep money local that would otherwise leave town on a Wyoming coal train.

Now different parts of the CEP are taking on lives of their own.

The Holland Board of Public Works will begin work next month on a highly efficient, attractively landscaped gas-fired power plant, dubbed the Holland Energy Park, to replace its aging and dirty lakeside coal plant. A blue-ribbon citizen committee helped hash out its snappy exterior design.

Meanwhile, engineers are determining if the plant’s waste heat can be shared with buildings as it’s piped downtown to what would be an expanded snowmelt district. And with the HBPW now receiving electricity from a local landfill and two wind farms, the utility estimates that 14 percent of its energy will come from renewable sources in 2015. That’s well above the state’s plateauing 10-percent requirement, which Gov. Rick Snyder indicates he wants to expand.

There is strong activity at the grass roots level, too.

A city council-appointed citizen task force designed and is launching a pilot program to provide each of Holland’s 7,000-plus homes with affordable and thorough efficiency renovations to cut energy use by up to 50 percent. A similar working group designed and is moving forward on a building-efficiency labeling pilot project, which rates and marks residential buildings in much the same way the U.S. EPA rates vehicle gas mileage.

Both are pioneering projects. The retrofit project, in particular, not only requires the new financing tool the state Legislature approved last month at the city’s behest, it also needs strong commitments from hundreds of city homeowners over the next few years if it’s going to work.

That’s why a year ago, when city leaders heard about the $5 million Georgetown University Energy Prize, they saw a prime opportunity to boost citywide interest in the CEP—and quickly jumped onboard.

The city of 33,500 experimented with home-efficiency upgrades in 2009 via the BetterBuildings for Michigan project. It was part of a nationwide, U.S. Department of Energy program that funded residential efficiency work in hundreds of cities to convince homeowners to pay attention to and invest in home energy efficiency.

“The (Georgetown) competition is trying to get at that stuck problem,” said Anne Saliers, community and conservation programs manager for HBPW. “How do you get widespread energy efficiency upgrades in residential housing stock?

“When you look back in history to when there’s been a stuck problem,” she added, “one way to get innovation is to have a competition.”

With the nationwide, 52-city competition arriving right on time, Holland and HBPW officials decided to hold a pep rally.

Purposeful Partying

So, on a windy weeknight in November, about 150 Hollanders braved an early-season snowstorm to gather at Baker Lofts, a former furniture factory that now houses co-working spaces, apartments, a salon, and a narrow area perfect for a wintertime rally.

City councilmen, utility officials, businesspeople, graybeards, and 20- and 30-somethings showed up, eager to help win the big money. Victory will require strong community participation: The contest tracks total residential energy use for lighting and heating, as well as municipal consumption, including streetlights, parks, and public schools. The city that cuts its total energy use the most over the next two years when compared to the previous two years wins the prize.

Saliers likened holding the rally seven weeks before the competition started, on Jan. 1, to being in “a sailing regatta, positioning ourselves to cross the starting line” at full speed at the opening gun.  

At the rally, people dipped and munched veggies, bought and sipped drinks, and chuckled appreciatively as Mayor Kurt Dykstra cracked jokes, emceed a live video hookup with Georgetown officials, and introduced Councilman Brian Burch.

Burch explained that the city’s six wards were now re-jiggered into four competing districts to spur intramural rivalry to juice interest in the national contest. He challenged his fellow councilmen and folks within the contest districts to try to win the first in-town round by getting the most furnace tune-ups by March 31. Anyone getting a tune-up would be in a drawing for a brand new, high-efficiency furnace.

He waved one of the 1,000 door-hanger bags stuffed with efficiency goodies on nearby tables. The bags held LED nightlights; flyers listing efficiency rebates from HBPW and SEMCO, the city’s natural gas company, for all sorts of efficiency upgrades; U.S DOE booklets with energy tips; discount coupons for furnace tune-ups, new high-efficiency gas furnaces, and home energy assessments; and a card explaining the Georgetown prize.

Burch urged everyone to grab some of the bags, deliver them to neighbors, and spread the excitement.

“We’re in it to win it!” he crowed, to hearty applause.

‘The Best Deal Ever’

A few hours before the rally, in his City Hall office, City Manager Ryan Cotton projected that same can-do attitude.

Cotton, the city’s liaison for the home retrofit task force, calls the budding program “the best deal ever.” He said Holland is working with Schneider Electric, the international energy services provider selected to provide home energy upgrades. The retrofit task force has shaped its pilot program to execute major energy improvements on 50 Holland homes.

The city manager arranged for loan capital from a local credit union and Michigan Saves, the statewide, nonprofit center for low-interest efficiency loans and qualified contractors. Officials then used city, HBPW, and SEMCO funds to buy down the interest rate to 1.99 percent for pilot project participants.

The efficiency task force designed its initial, 25-home pilot while waiting for the Michigan Legislature to approve so-called “on-bill” financing, which is crucial to the home efficiency program’s ultimate success. It was launched late last year, and energy assessments are now complete for all 25 homes. Cotton said the project is awaiting final council and homeowner approval before retrofitting crews get to work.

“The outcome will be $5,000 to $20,000 upgrades, along with an energy label and an energy-savings guarantee for their first year,” Cotton said.

“We’ll get the first batch of 25 homes done, and then plan future budgets from there,” he said. “We’ll have the results in each home analyzed and be able to go to the second batch. Then we’ll go to scale.” 

The on-bill law allowing the program to go full bore, sponsored by local state Rep. Joe Haveman, passed in late December. It’s crucial for the home retrofit program because it allows municipal utilities like HBPW to place efficiency loan repayments on ratepayers’ electric bills. Since non-payment would mean a power shutoff, such loans are very low-risk, allowing very low monthly notes that the upgrades’ energy savings should largely cover.

“On-bill financing is huge,” Cotton said. “Most people don’t have $15,000 they can just plunk down, but most will do this if it only ends up costing them an additional five or 10 dollars a month (counting the offset from their energy savings). And after 10 or 15 years, when the loan (which stays with the home) is paid off, they get $100 monthly savings. Some houses are so drafty that it could work out to $10 or $15 less per month, and then huge savings when it’s all paid off.

“It makes neighborhoods stronger,” he added.  “And it’s another way to market a community that is older than its neighbors, yet is reinventing itself to remain competitive economically, but more charming, as well. This is something you can write home about.”

With an on-bill law in place and the pilot home retrofits now under way, the next step will be activating the new Holland Energy Trust, which will assemble new capital and make the loans. The trust could tap a credit union, an energy bond, the general fund, or other sources.

He estimated that, with on-bill and the trust operating as a revolving fund, “a couple hundred thousand dollars would do a lot” to get the residential program running. Smiling, he added, $5 million “would be plenty big enough.”

Schneider Electric teed up the first 50 homeowners, selecting them from 97 that applied with a $100 down payment, assembling a group that Cotton said was a good mix of home age, furnace condition, electricity use, and geography.

“We let the pros make the decision based on objective criteria.”

Holland’s Moonshot

Gathering objective criteria is the essence of the building-label task force’s pilot, led by City Planner Mark Vanderploeg.

After choosing a label to best summarize a house’s efficiency numbers, and recruiting 50 homeowners to participate in the first, free program, it is now almost done: 42 homes should be analyzed, rated and labeled in the next few days.

The city hired and is paying the Green Homes Institute, of Grand Rapids, $350 for each home analysis. Requirements for participation were minimal.

“They have to live in the city, their property has to be in the city, it has to be a single-family residential, owner-occupied home.” Vanderploeg said.

The homeowners share two years of their gas, electric, and, if they chose, water bills with Green Home, and must then share the next two years of energy data, as well. The inspection includes a blower door test and infrared scan for air and energy leakage, evaluation of heating and cooling systems, ventilation, and, if requested, water usage. The firm even checks the roof for its solar panel potential.

The evaluator also looks for gas and carbon dioxide leaks and provides a do-it-yourself radon detection kit. 

Homeowners with completed evaluations already have their energy labels, produced by Cake Systems, of Portland, Ore. They use a single number to rate the entire home, from zero to 70. But the accompanying report has lots of information about individual rooms, appliance performance, and other criteria.

Green Home also offers an additional, free service that could be quite valuable, according to Executive Director Brett Little.

“We will also come back if the homeowner has some work done to improve his score, and inspect that work,” Little explained. “If there is a problem, we encourage them to go back to the contractor.”

If the work checks out, Green Home raises the home’s rating.  

“We’ll also help them with potential financing options if they need that, plus contractor recommendations. Our goal is to create a pool of contractors willing to do this work and do it well,” he added.

Vanderploeg sees the building-labeling project as a way to encourage participation in the home retrofitting project. He, like Saliers and Cotton, realizes the significant challenge of spurring large numbers of homeowners to look into, and then do something, about their building’s efficiency.

He thinks home labeling will remain voluntary for the foreseeable future, but thinks it could become widespread—even when sellers or buyers have to pay for it.

“I see this as a pump-priming exercise that hopefully will catch on and people will just start requesting the labeling from the home seller before they buy,” Vanderploeg speculated. “Maybe the seller will say, ‘The local market has reached this tipping point, people are expecting this, so I’ll just go get that rating number.’”

Peter Boogaart, who many Hollanders say is one of the true champions of the CEP, and who performs energy efficiency work on behalf of the Ottawa County Community Action Agency for families struggling to pay their bills, takes the long view.

“A lot of people have worked very hard to get to this point,” he observed, speaking quietly in a modernistic meeting room at HBPW’S service center. “We all embraced making Holland a world-class energy efficient city. To me, the essential piece is the willpower.

“I liken it to 1961, when JFK told us we were going to the moon. He didn’t know how to get to the moon. But they said, it’s our goal, we are serious about it, and we are going to do it. That is the essential piece in our community energy plan.”

Jim Dulzo is the Michigan Land Use Institute’s senior energy policy specialist. Reach him at jimdulzo@mlui.org.

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