With many multifamily property owners already spending up to about 20% of their overall operating budget on utilities, it can seem like a tough financial decision to invest more in energy-efficient upgrades. Even though 61% of renters say they are willing to pay more for properties that are eco-friendly, when budgets are tight and the current systems aren’t broken, the annual savings and possibility of higher occupancy rates might not have seemed enough to justify the switch.
However, now there’s a way to reduce new installation costs and annual utility spending while increasing occupancy rates with just one move: partnering with a local utility, such as National Grid, that can help multifamily properties upgrade to more energy-efficient solutions. From on-site energy assessments to incentives and expert guidance, National Grid’s goal is to ensure safe, healthy, cost-effective living environments for its clients.
“By helping our multifamily customers reduce their energy usage, National Grid is better able to meet the needs of our service area,” states National Grid. “Plus, it helps us do our part in reducing carbon dioxide and other greenhouse gas emissions, as well as reducing our reliance on imported fossil fuels.”
Renters want energy efficiency.
Among the 44 million renter households in the U.S., about 75% pay their utility bills. For those renters who are responsible for utilities, it’s no surprise that they’d like to see a reduction in annual costs. However, it may be surprising to know that many also are willing to pay more monthly rent to receive an improvement in energy efficiency.
A 2022 study from the American Council for an Energy-Efficient Economy (ACEEE) revealed that renters selected the most energy-efficient listings 21% more often and, on average, were willing to increase monthly rent by 1.8% annually, which is more than $400 of revenue per unit each year.
However, building owners aren’t required to disclose energy information to potential renters in most U.S. cities, which can actually be good news to a property manager who wants to increase occupancy. Developing a strategic energy-efficiency program and then marketing it to potential residents creates a competitive advantage, enticing those who are already energy efficient-motivated.
Energy efficiency reduces annual costs.
According to the ACEEE, a comprehensive, strategic approach to energy management can save $3.4 billion in utility costs and it can improve the energy efficiency of U.S. multifamily properties by up to 30%. Still, even with the annual savings and potential increase in occupancy revenue, there’s the expensive hurdle associated with making the equipment and materials switch to more energy-efficient systems.
In addition to tax incentives, local utility companies offer rebates and assessments to customers that relieve the uncertainty of how to begin and unburden the initial financial investment. By working with a regional energy expert, it’s easier to identify the ways a property can reduce energy, water, and waste across all of your multifamily properties so the overall operating costs go down and the properties’ asset value goes up.
“We have already noticed the savings in our energy bills,” says Robert DeWeese of Syracuse, New York-based Morgan Management. “We were able to take advantage of the tank and pipe wraps, aerators, showerheads, and CFL upgrades. For a company our size, these small savings, or in some cases not so small, from each property snowball into huge savings very quickly.”
A 318-unit low-rise complex is saving more than $63,000 annually in electricity and more than $74,000 in gas, with less than $1,000 spent in project costs, after National Grid incentives were factored in.
Customized solutions can start small.
While not every multifamily building owner has access to a local utility partner that offers incentives and support to make large-scale switches to energy-efficient solutions budget-friendly, a few targeted smaller-scale upgrades annually like pipe wraps or high-efficiency showerheads can start to make a dent in decreasing annual energy use and increase the overall comfort of residents.
For those residents who pay their own utility bills, they are financially incentivized to try to conserve electricity, water, or gas, so they have money to pay for other necessities. By finding out how to work with a local utility provider who is willing to support energy-efficient solutions now, owners can benefit from renting properties as quickly as possible without making tight budgets even tighter.
For more information about understanding and improving your multifamily building’s energy efficiency, head over to National Grid.