A few months back, Frank Hays found himself in what he calls a “landlord’s plumbing nightmare.’’ At both of the rental properties he owns in Worcester, and even at his own home in Framingham, things just kept going wrong. Water heaters? Busted. Heating system? Down. Appliances? Shot.
“I had more things go wrong in two months than I had in six years,’’ he said.
Being an eco-minded kind of guy, and in need of replacements for the broken units, Hays turned to Mass Save, the state’s utility-run energy efficiency program, for assistance with new equipment that would be more durable, highly efficient, and good for the planet. But even with the help from incentives, his out-of-pocket costs were still too high, while any savings on utility costs would be realized by his tenants, not him.
Ultimately, instead of heat pump water heaters and other climate-friendly appliances, he opted to replace his broken equipment with what he’d had previously.
His is an experience many landlords in Massachusetts can relate to, and the reason people living in rentals — who make up more than one-third of households in the state — have been largely left out of the effort to slash emissions.
Now, a new, three-year plan from Mass Save is poised to change that. The state program is funded by ratepayers through a surcharge on their gas and electric bills, and every three years, it releases a new plan that governs how much it will spend and what kind of incentives it will offer. The latest iteration increases funding for energy efficiency by 25 percent, to $5 billion over three years.
The new Mass Save plan, which is under review by the state Department of Public Utilities and expected to be finalized early this year, includes incentives for owners of rental units in 21 so-called designated equity communities, which have high percentages of renters and low- and moderate-income residents. Those include Boston, Worcester, Springfield, and Fall River.
New rules would cover the entire costs of weatherization, such as adding insulation or sealing windows to keep in heat, instead of providing only partial reimbursements, as long as at least half the building is rental units. For those buildings, Mass Save will also address legacy issues including the presence of asbestos or knob-and-tube wiring.
“We’re really trying to work with the landlords to have an offer that breaks down those cost barriers to renovating the rental units,’’ said Kate Peters, director of energy efficiency at Eversource who spoke on behalf of Mass Save administrators.
One big advantage for landlords wanting to convert from fossil fuels to electric heat pumps: They also provide air conditioning, which should increase tenant satisfaction, reduce turnover, and make those units more marketable, according to Douglas Quattrochi, executive director of MassLandlords Inc.
Mass Save’s new plan also aims to increase weatherization and installation of heat pumps at no cost to low- and moderate-income households, and to support energy efficiency and electrification in schools, especially in so-called environmental justice communities.
The new plan is a further evolution of a program that just a few years ago was at odds with the state’s climate target, offering incentives for new equipment running off fossil fuels even as the state committed to essentially eliminating carbon emissions by the 2050.
Oliver Sellers-Garcia, Boston’s Green New Deal director, said Mass Save’s focus on equity and renters makes him “cautiously optimistic’’ the city “will be able to actually make headway on some of our goals with Mass Save.’’
For Hays, it means the next time he needs an upgrade, he’ll be able to take steps to convert his rental buildings to electric heat pumps, which use the difference between inside and outside air temperatures to generate heating and cooling. “I’m not this super wealthy landlord that can afford to do anything he wants,’’ he said, so having costs covered makes all the difference.
The new plan offers protections for renters, requiring that landlords not raise the rent due to Mass Save improvements and that the overall energy costs to tenants do not go up due to the upgrades.
Electric heat pumps save money on gas or oil bills, but increase electricity bills. If a building is currently heated by oil or propane, overall energy costs could go down by $50 to $340 per year in an average home after converting to heat pumps, according to Mass Save. But if a building is using gas heat, switching to electricity could increase overall outlays by $60 a year, which would have to be covered by the landlord.
Still, Quattrochi, of MassLandlords, said he has heard a lot of enthusiasm from landlords about the proposed changes, which he called “transformative’’ in their ability to move rental buildings in Massachusetts off fossil fuels. Not to mention, “everyone has to or we’re all doomed by climate change.’’
Buildings account for more than one-third of all greenhouse gas emissions in Massachusetts, and changing the heating source from fossil fuels to electricity — largely through electric heat pumps — is a priority for the state government. The incentives from Mass Save are the state’s primary tool to get households to upgrade their heating units.
Although the electricity grid is powered by roughly 50 percent natural gas, heat pumps use considerably less energy than oil or gas systems.
Mass Save proposes to install heat pumps in 119,000 households over the next three years, including 23,000 low- and moderate-income households and 15,000 rental units. If Mass Save hits those numbers, the state is expected to reduce greenhouse gas by a total reduction of 1 million metric tons by 2030, the equivalent of removing 233,255 gas-powered vehicles from the road for a year.
Still, that’s less than halfway to meeting the state’s legally mandated climate goals.
Fulfilling the state’s targets for reductions in greenhouse gas emissions, the utilities calculated, would require electrifying a total of 268,000 households, and the incentives would have to cover 100 percent of those costs for low- and moderate-income households, 80 percent of the costs for other households, and 100 percent of weatherization for everyone.
The price tag: $14 billion, nearly triple the current budget, according to a Mass Save filing to the Department of Public Utilities; again, all of that would have to be funded by utility customers.
The $5 billion plan proposed by Mass Save will result in changes to ratepayers’ utility bills, depending on which utility they use. Berkshire Gas and Liberty Gas expect monthly bills to increase less than $1, with some even decreasing; Eversource customers in Boston and its neighboring communities, however, could see bills increase as much as $38 during peak heating months in 2025, but then would decline in the following years, according to filings with the state.
Already, those costs are showing up. This fall, natural gas customers saw rate hikes between 11 and 30 percent, due at least in part to Mass Save’s new plan, according to National Grid and Eversource. Electric bills may be rising too. National Grid, for instance, increased its rates by 3 to 3.5 percent this fall.
Regarding greenhouse gas emissions, the gap between how much Mass Save aims to cut and the state target is a problem, but it’s not “a Mass Save problem,’’ said Mary Wambui, who sits on the state Energy Efficiency Advisory Council, which oversees Mass Save and other state initiatives. “The Commonwealth needs to think about where else it can get funding to achieve decarbonization goals.’’
Kyle Murray, of the Acadia Center, said there are some efforts underway by advocacy groups and the utilities to identify other funding, but that largely, the shortfall isn’t being addressed.
“We’re pushing these programs as far as they can go on current budgets,’’ he said. “We really need to be finding alternative sources of significant funding for the program that doesn’t put it again on the back of ratepayers.’’
Sabrina Shankman can be reached at sabrina.shankman@globe.com. Follow her @shankman.