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Draft Mass Save Three-Year Plan is Out. What Cities and Towns Need to Know.

The Draft Mass Save Three-Year Plan is Out. Here’s What Cities and Towns Need to Know.

Written by Brooks Winner, Senior Clean Energy Specialist

Massachusetts is updating its nation-leading energy efficiency program. Here’s what your community needs to know to weigh in and help make the program better and more equitable.

April 29, 2024 - Every three years, the Mass Save program’s administrators develop a new plan that outlines how they will incentivize energy efficiency and help the Commonwealth meet its greenhouse gas reduction targets over the next three years (‘The Three-Year Plan’). On April 1, 2024, the Mass Save sponsors released a draft of the 2025-2027 Three-Year Plan proposing to spend $4.99 billion on energy efficiency and decarbonization programs. We’re still working our way through the full draft, but so far it seems that the sponsors have proposed some encouraging changes that align with what we’ve heard from municipalities around Massachusetts and the Energy Efficiency Advisory Council’s (EEAC) recommendations that MAPC supported in December (the EEAC is a stakeholder body that guides the plan development process). That said, we have concerns about the total price tag, most of which would be collected from electric and gas customers, and we are concerned that the plan doesn’t go far enough when it comes to equity. This blog post outlines the priorities that we’ve heard from cities and towns, summarizes our initial takeaways about the draft plan, and highlights how your community can provide feedback before the plan is finalized later this year.

What We Heard From Massachusetts Cities and Towns

MAPC represents Massachusetts cities and towns on the EEAC and co-chairs the EEAC’s Equity Working Group, which works to identify barriers, propose strategies, and monitor progress to increase equitable access and participation in energy efficiency programs among underserved customers. When the Three-Year Planning process kicked off last summer, we met with local leaders from around the Commonwealth to get their thoughts about how to improve the Mass Save program. Here’s what we heard:

Make Mass Save more accessible and equitable The 2022-2024 plan included ambitious equity goals and targets to help make Mass Save’s programs and incentives more accessible to those who have been underserved by the program for years. However, the community leaders we spoke with highlighted continuing concerns that Mass Save is not fairly and effectively serving Environmental Justice (EJ) communities, renters, moderate-income households, people who speak languages other than English, and small businesses. Specifically, community leaders recommended that Mass Save provide bigger, better incentives to owners of rental buildings paired with protections against rent hikes and work to engage building owners to help them access Mass Save programs.

Pictured: Municipal leaders providing input on their priorities for the Three-Year Plan. Photo credit: Brooks Winner, MAPC

Support targeted decarbonization efforts that lower energy burdens – Over the last few years, Mass Save has helped install 95,000 heat pumps, but only a small fraction of those systems – less than 10% – were installed in low- and moderate-income (LMI) homes. While switching from gas to heat pumps can increase energy costs given current electricity rates, the local leaders we spoke to agreed that Mass Save should focus on helping LMI households that heat with higher-cost fuels like oil, propane, or electric resistance. Combined with weatherization solutions, heat pumps can lower costs, improve comfort, and provide efficient heating and cooling. We also heard that communities want Mass Save to phase out support for new fossil fuel systems. Fortunately, the state climate law passed in 2022 prohibits Mass Save from spending on new fossil fuel equipment (with a few exceptions for low-income homes, hospitals and emergency facilities, back-up generation, and hard-to-electrify uses).

Invest in community partnerships – One of the great success stories of the last several years of energy efficiency programs in Massachusetts is the Community First Partnership (CFP), which provides funding for municipalities and their community partners for outreach initiatives that boost participation in Mass Save, particularly focusing on underserved groups like renters, people who speak languages other than English, and small businesses. These partnerships have yielded impressive results and community leaders agreed that the 2025-2027 plan should significantly increase CFP investments and provide them with the flexibility to promote Mass Save.

Give communities the data they need to succeed – Municipal partners highlighted the importance of having access to actionable data to guide their outreach and decarbonization initiatives. For example, if a city or town doesn’t know roughly how many homes still heat with fossil fuels in a neighborhood, it’s hard to figure out where to focus outreach. Municipal partners have expressed concerns that data sharing with municipalities—even those working in partnership with Mass Save through the CFP—has been frustratingly limited, which has constrained their ability to develop more targeted local efforts. The Mass Save program administrators have long cited customer privacy concerns as a reason they can’t provide more useful data, but municipalities have pointed out that these data can be aggregated at the neighborhood level to protect customers while still giving local leaders the information they need to successfully target their efforts.

Initial Thoughts on the Draft Three-Year Plan

The draft Three-Year Plan includes some exciting improvements and there’s a lot to like, some elements that need clarification, and some that are concerning.

  • Improved offerings and more support for “equity communities,” renters, and moderate-income customers – The Mass Save sponsors have proposed to spend more than $1 billion in incentives for LMI customers and renters – the most ever. They also identify 21 “equity communities” with high proportions of renters, moderate income residents, and homes heated with delivered fuels (see p. 103 for the full list of equity communities). These communities will receive increased support and specialized incentives including 100% no-cost incentives for weatherization for everyone, 100% electrification (e.g., heat pumps), and barrier mitigation (e.g., electrical panel upgrades) for low- and moderate-income customers.
A chart that summarizes residential and low-income offers in designated equity communities from the Mass Save Three Year Plan.
  • Increased funding for Community First Partnership – The draft plan proposes to increase funding for Community First Partners, adding more communities and increasing the average amount awarded to each community. The draft increases funding for the CFP awards by more than $2.5 million, a 75% increase, but we hoped to see at least double the investment from the last plan, allowing communities to hire full-time energy advocates and increase their outreach efforts to accelerate clean energy adoption and improve access to energy saving programs.
  • Increased focus on decarbonization, particularly in the residential sector – Home energy assessments will be redesigned to emphasize opportunities for eliminating fossil fuels. That sounds great, though we’ll also need the incentives to help customers make the switch. The programs for new construction in both residential and commercial buildings have also shifted to promote all-electric new construction, a welcome change given that Mass Save is still incentivizing thousands of fossil fuel-heated new buildings per year under the current plan.
  • Specific decarbonization offerings for schools – For the first time, the Mass Save sponsors have proposed to include special support for energy efficiency and electrification in schools in the 21 designated equity communities. While the details are unclear, they say it could include “support for municipal energy managers, including resources shared across communities…, decarbonization roadmap support, other technical assistance, enhanced incentives, assistance for communities in applying for federal and state funding, and equipment training for facilities staff to schools and other public agencies.” (See p. 175 for more details.)
  • Emphasis on improving and simplifying the customer experience, including multilingual support – The draft plan highlights the need to improve the user experience for Mass Save customers, especially those who speak languages other than English. This was a major priority of the EEAC’s Equity Working Group, and we’ll be tracking this closely to make sure that the sponsors are doing everything they can to streamline programs and lower barriers without adding unnecessary red tape or administrative expenses.

We’ll need to know more about:

  • The sponsors have proposed some changes to make actionable data available to support communities’ climate action efforts, but it’s not clear how much this will help – This was a major priority for the local leaders we spoke to, and the draft plan proposes some changes to the data aggregation standards and a new approach to sharing data with Community First Partners. However, it isn’t clear that these changes would address the needs of our communities. They should strengthen their commitment to sharing useful data while protecting customer privacy in the final draft.
  • The new moderate income turnkey solution: will it get us on track? – The plan acknowledges how Mass Save has underdelivered when it comes to moderate-income customers and proposes to develop a full-service “turnkey solution” that will hopefully remove some of the logistical and cost barriers to participation for these customers. We’re cautiously optimistic that this will help deliver better service for moderate-income residents, but it depends on how it’s implemented. For example, the plan notes that under the turnkey model, “incentives will be delivered instantly, which will reduce or eliminate out-of-pocket costs for participants,” (emphasis added). This sounds promising but leaves a question about whether the program will still leave customers with some out-of-pocket costs.

Now the concerns:

  • The plan doesn’t go far enough in addressing long-standing programmatic inequities – The Equity Working Group made working toward distributive justice a top priority for this plan. The Mass Save sponsors have not achieved this priority with the draft, choosing instead to hold up the $1 billion+ they plan to spend on LMI customers and renters. Wealthier “market rate” customers and single-family homeowners would still receive the vast majority of incentives - $1.3 billion, or 82% – in the residential sector according to the first draft, but market rate customers are only 54% of the total population. Of the 114,000+ heat pumps the plan proposes to install, only 10,168 of those would be in low-income homes and only 5,685 in moderate income homes. Renters are also underrepresented in the draft plan budget. While 38% of households in Massachusetts are renters, only 21% of incentives in the plan would go to renters. In the final plan, we need to see a clear indication from the sponsors that they are on track to close the gap in spending for underserved customers as soon as possible.
  • Is the Mass Save price tag too big? – The 2022-2024 plan was the largest ever at just under $4 billion dollars, and the sponsors have now added another $1 billion for the 2025-2027 plan. We have lots of work to do when it comes to increasing energy efficiency and decarbonizing buildings, but the bigger Mass Save gets, the more money utilities charge their customers and the higher our energy bills get. These increased costs hit in a regressive way, with low- and moderate-income people spending much larger portions of their income on energy costs, and the program continues to distribute benefits in a regressive way that benefits wealthier customers. We still need to see bill impact analysis data on the new plan from the program administrators, but we are concerned that a bigger price tag under the current structure would only increase inequities. We are also concerned that some of the changes that the program administrators propose in the draft may add redundant services and inefficiencies that don’t actually improve program performance and increase administrative costs. For example, the statewide contact center referenced in the plan might be helpful, but it may also duplicate efforts already underway to create a statewide decarbonization clearinghouse.

How to Weigh In on the Draft

We need your input to make the final plan the best that it can be. The EEAC is holding three public comment sessions in April, May, and June. Visit the EEAC website for details. MAPC is hosting its own engagement session on Wednesday, May 1 at 12:30 p.m. on Zoom for cities and towns to give their feedback on the draft plan. Join us to share your thoughts on the plan: What do you like? What needs to change in the final draft? What's missing? MAPC will use your input to craft a memo to the Mass Save program administrators and the EEAC outlining the changes needed before the program administrators finalize the plan. Register here.