Lessons from ARRA Funding
The 2009 American Recovery and Reinvestment Act (ARRA) funding was an amazing, and unparalleled, opportunity. I helped implement, administer, and secure $30 million in funding for home upgrade programs that had lasting impacts and shaped the way I design programs today. As I talk with clients about “shovel-ready” programs should federal funding become available in 2021, I’ve been sharing four lessons I learned from my ARRA projects.
Lesson 1: Be prepared to move the money.
The programs I implemented were funded through the Energy Efficiency and Conservation Block Grant Program, a new $3.2 billion block grant that DOE administered and just one sliver of DOE’s massive economic boost. Each EECBG recipient had to move the money fast. Our local government partners and clients aimed to retrofit 30,000 homes by scaling up existing whole-house retrofit programs. As the implementer, Frontier Energy soon discovered that existing programs couldn’t scale as fast as they needed to. My team pivoted and designed a faster, more flexible program, Flex Path, that had its own timeline and tempo. For future funding, we’ll focus on pace and scale simultaneously by leveraging existing resources and workforce instead of tagging on to other programs.
Lesson 2: Design programs for the people with the fewest resources.
Whole home retrofit customers tended to be more affluent homeowners. Flex Path used a combination of measures from a menu-based approach, varied incentives, and reduced upfront costs for homeowners, that increased the number of moderate-income customers that participated. However, the program was still out of reach for many low-income households. In future programs, we’ll incorporate alternative financing mechanisms, like on-bill financing, and the layered incentive approach that we use with clients’ EE programs today.
Lesson 3: Concentrate on the workforce.
ARRA programs included extensive consumer education and advertising to drive demand. We found that despite all the mass media investment, retrofits were triggered by a homeowner’s problem, like a broken water heater, and driven by the participating contractor. We shifted budget from consumer outreach to contractor co-op marketing and saw a direct correlation between marketing and retrofits. We use a contractor-focused approach in other EE programs with the same result and will design future programs with the workforce as the motivating element. If a program or measure makes business sense, then the contractor will help it make sense to the consumer.
Lesson 4: Be prepared for the money to run out.
We were relentless in getting non-ARRA funding and continued the program for several years. However, all programs end eventually and when it did, we saw many grantee programs’ momentum fall off a cliff. Contractors that built a business around energy efficient technologies couldn’t sell them without generous incentives. Some contractors closed shop and others returned to box swapping. In our current programs, we teach contractors about a range of equipment, techniques, and sales approaches so they can maintain the push for energy efficiency when the rebates end.
If the new administration launches an energy stimulus package, it will likely build on the principals of 2009 ARRA and incorporate many of today’s issues including equity, affordable housing, and assisting small businesses.
I’m interested in your thoughts about ARRA and what we might see coming from DOE next year. Send me an email and connect with me on LinkedIn.
Originally written by Nancy Barba, Frontier Energy — https://frontierenergy.com/blog/#lessons-from-arra-funding
