Affordable Heat-Pump Project Launched

Milena Bimpong, the tenant engagement coordinator at Sustainable Finger Lakes, ran the SFLX information table at a Southside Community Center event last fall. Provided by Sustainable Finger Lakes.
In February 2022, Sustainable Finger Lakes (SFLX) was awarded a grant through the Innovative Market Strategies (IMS) program at the New York State Energy Research and Development Authority (NYSERDA) to support the installation of high-efficiency heat pumps in 100 lower-income rental units in the City and Town of Ithaca.

Now, in February 2023, SFLX is ready to roll out installation efforts. While this high-efficiency heat pump program is in its early stages, it has ambitious goals that will benefit the local community by improving rental properties while focusing on low-to-moderate income (LMI) tenants.

The new grant will provide $585,000 in extra incentives for heat pumps, electric panel upgrades and heat pump water heaters in Ithaca rentals occupied by tenants earning less than 80% of median income for their household size.

The project is focused on rentals in buildings with one to four units. Apartments must be brought up to minimum standards for insulation and air sealing before installing heat pumps, but landlords can tap into generous existing subsidies to get that work done as well.

One of the benefits of the program is that it is designed to address the “split incentive” barrier that often prevents energy efficiency improvements in rental properties. In this case, the “split incentive” is landlords paying to upgrade units and installing the new pumps so that everything can work at its most efficient level, resulting in lower energy bills for tenants. Without an incentive for landlords, they are less likely to make upgrades outside of basic maintenance requirements.

Gay Nicholson, president of Sustainable Finger Lakes, has been involved with combating the climate crisis for 30 years. Nicholson also serves on the board of HeatSmart Tompkins and the Tompkins County Planning Advisory Board. Part of her efforts have been focused on including LMI households in the transition to clean energy.

“I have always felt that climate change and inequality are our two biggest problems, and so I try to take a systems approach to address linked problems,” Nicholson said.

To make the upgrades happen, the SFLX team plans to take a whole-systems approach by working directly with landlords, tenants and their equipment installers. They will also work to address the split incentive.

“It’s a pretty complex pilot project,” Nicholson said, “but it’s important work because this category that we’re working on is one- to four-unit buildings – older houses that have been cut up into apartments – that’s 24% of the LMI housing in New York state.”

Nicholson continued that the pilot’s goal, with the various teams on this project, is to study what does and does not work so that as the project grows they can apply what does work to other regions and help low-income tenants across the state of New York.

In other conversations with SFLX, landlords have raised concerns about investing in new energy systems when tenant behaviors are not always efficient.

“Many Ithaca landlords are renting to students, so there’s a lot of young people in rentals where doors and windows are left open, lights are left on, that kind of thing,” Nicholson said. “So then, the landlord is like, ‘Why should I invest in energy efficiency? It’s meaningless with this behavior.’ We’re saying we will provide education to your tenants about energy and climate issues, and specifically about best practices for cooling and heating with the heat pump.”

This tenant education will hopefully make landlords more comfortable with investing if they know their investments will be used properly by tenants. This is important because, while there are significant monetary incentives for landlords to be involved in the pilot, they have to agree not to raise the tenant’s rent for two years, except to recover documented increases in property taxes, if applicable.

Residents must agree to attend a climate information session that educates residents on climate issues and how to change their energy consumption to better the planet and their wallets.

Additionally, accepted tenants must also sign an agreement to share their story about their experience in the pilot and how their comfort and indoor air quality issues were addressed, along with providing reasonable accommodation for the contractors accessing their homes to make the energy improvements.

Performance Systems Development (PSD) is an Ithaca-based, national business that is supporting the project with energy and heat pump performance modeling software. PSD translates building science information into innovative efficiency programs, engineering services, training and software tools. The modeling software used in this project was developed with support from the U.S. Department of Energy (DOE) and NYSERDA.

“The software will help make it easier to determine the savings and the design and size of the heat pump,” said Greg Thomas, Chief Strategy and Technology Officer at PSD. “Using data from the software, we’ll be able to track whether the building is performing as expected or not.”

Thomas emphasized that another benefit of the modeling software is that it will help to reassure landlords that their investments are worth the costs and effort. As it collects the necessary data to help users and the investors, it is also informing people about energy savings and what does or does not work. Moving forward, it will also provide useful information to support energy policies and laws.

“Whatever we learn is going to help inform the next stage of making these kinds of investments,” Thomas said. “The other thing that we want to be deliverable to NYSERDA is a home energy score for the completed project.”

Created by the DOE, a home energy score report estimates home energy use and costs, and provides energy solutions that will improve a home’s efficiency. Homes are scored from 1 to 10, where a 10 represents the most efficient homes. This information and more can be found on the DOE website.

Thomas said that this information, once collected, will be provided to the city so that they can see what decarbonization in rental units looks like and make more informed policy decisions.

With this grant and an extra state subsidy, SFLX is excited to be able to implement this pilot program and involve businesses like PSD in LMI households that otherwise might not afford the technology.

“Switching to heat pumps is pricey, but then operating costs are super low, and you have better indoor air quality, plus that summer air conditioning that maybe you never had before. People are so happy about that,” Nicholson said.

In an email to Tompkins Weekly, a representative of NYSERDA said that a free home energy audit is recommended first to see what measures can be taken to increase energy efficiency in a home, which will reduce energy use, help save money on energy bills and make a home more comfortable.

In similar projects that Nicholson has worked on in the past through their Finger Lakes Climate Fund, SFLX was invited to share their data and learning experience at the state level, which inspired the invitation to apply to the IMS program. Nicholson hopes that this current project will have a positive effect on clean energy efforts in the near future.

Tenants interested in the program or who want to know if they qualify can contact

Landlords interested in the program or who want more information can contact

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