Kentucky Home Performance

In October 2010, Kentucky Governor Steve Beshear unveiled a new plan to create jobs by developing the state’s home performance industry. The result was KY Home Performance (KHP), Kentucky’s first statewide residential energy efficiency program.

At the outset, the program’s developers—the Kentucky Housing Corporation and Kentucky Department for Energy Development and Independence—faced a big hurdle: there were only 10 Building Performance Institute (BPI)-certified contractors in the entire state. So KHP enlisted Conservation Services Group, a nonprofit provider of BPI training, to recruit and train contractors to perform Home Performance with Energy Star jobs. The program required all contractors to take a free webinar or in-person course on energy-efficient installations and loan and rebate processing. KHP further invested in its contractors by providing one-on-one training in the proper use of modeling software for recording energy savings from every retrofit.

KHP quickly found that it could leverage this new network of performance-trained contractors to increase home energy retrofits statewide.

“We put the tools in the hands of the contractors to go out and sell [home performance] to consumers,” said KHP’s program manager, Andrew Isaacs. KHP equipped contractors with free logos, yard signs, brochures, vehicle magnets, and other marketing collateral. By May 2012, KHP had grown its network to 144 approved contractors, who retrofitted 1,071 homes throughout the state in less than 6 months, with an average 26% gain in efficiency per job.

The contractor starts each job starts with an in-home energy performance evaluation that details which retrofits will have the highest return on investment, allowing the homeowner to prioritize improvements. Then the contractor reviews financing options with the homeowner.

The homeowner can choose from below-market loans or cash rebates to offset the initial investment in energy retrofits. Eligible retrofits include Energy Star-rated programmable thermostats, central air-conditioning systems, air-source heat pumps, gas boilers and furnaces, windows, and doors. Indoor air quality measures, such as dehumidification and humidification, are also eligible for incentives.

To fund the program, KHP relied on a $4 million State Energy Program Grant through the American Recovery and Reinvestment Act (ARRA). The Kentucky Housing Corporation also invested $2.1 million, with the Kentucky Department for Energy Development and Independence and the Kentucky Finance Administration Cabinet providing additional support.

To make the most efficient use of its ARRA funding, KHP sought to reach as many cus-tomers throughout Kentucky as possible. Operating in a state of 120 counties and numerous utility territories, KHP decided that it would reach the largest audience by partnering with several key utilities, eventually securing partnerships with 25 gas and electric providers across Kentucky.

As of June 2012, KHP contractors have completed jobs worth a total of more than $10 million, generating significant sales and payroll tax gains for the state. Len Peters, Kentucky’s secretary of the Energy and Environment Cabinet, took note of the program’s value. “Homeowners get to improve the quality of their homes and save on their utility bills; utility providers get to defer construction of expensive new power plants and rate hikes. It’s a win for everyone involved.”

KHP’s success has been recognized on a national level, too. The U.S. Environmental Protection Agency named KHP a 2012 Energy Star Partner of the Year, making it one of three state government programs to receive such an honor.