Carbon & Energy Special Roundtable: The Future of Mass Save Incentives

The room was abounding with energy at last month’s Special Roundtable, bringing together subject matter experts and the practicing community, to share data and insights, and gather feedback to strengthen the future strategies and incentives coming into play to decarbonize existing buildings in the Commonwealth. Quick action from our community to pull together crucial real word project cost data, mixed with the safe space for active discussion on draft plans, combined to advance a robust discussion that showcased the unmatched dedication in this community of practice. 

The July Carbon and Energy Special Roundtable was kicked off by Kim Cullinane, Manager of New Construction Energy Efficiency at Eversource, who provided an overview of the Massachusetts 2025-2027 Energy Efficiency and Decarbonization Plan and introduced several deep dive topics for the roundtable.

The Plan, which lays out all areas of anticipated support from Mass Save Sponsors for the next three-year term, places heavy emphasis on decarbonization, including continued significant support for heat pumps, optimized customer experience, workforce development, and equity. The plan also provides for a continued focus on energy efficiency and includes new proposals for supporting non-energy carbon reduction measures, such as embodied carbon reduction, carbon capture, and refrigeration leak mitigation support. Notably, Mass Save Sponsors have eliminated all support for new fossil fuel equipment and new buildings/homes that use fossil fuel equipment in this plan (there are very limited exceptions). Mass Save Sponsors will file a final version of the plan with the Department of Public Utilities at the end of October. All elements of the plan are subject to DPU approval, which is expected at the end of February, 2025.

Following the overview, Mass Save sponsors introduced four deep dive discussion topics, including: approach to decarbonization, understanding decarbonization costs and barriers, potential Mass Save Sponsor support for embodied carbon reduction, and new developments in Mass Save support for multifamily new construction. Each topic was introduced and was then followed by open discussion amongst roundtable participants. In addition to Kim, Ryan Willingham, Senior Energy Efficiency Consultant at Eversource, Jacob Knowles, Chief Sustainability Officer at BR+A, and Joel Martell, Lead Analyst at National Grid, all shared insight on the deep dive topics and helped answer questions from the participants.

• The Draft Three-Year Plan for Mass Save will focus on a wide range of topics, including decarbonization, including continued support for heat pumps, gas equipment phaseout, nonenergy greenhouse gas measures, workforce development, customer experience, and equity
• Optimizing energy consumption is discussed as the first step towards decarbonization
• This Three-Year Plan offers incentives for customers who can can achieve a variety of different reductions in greenhouse gas emissions
• Mass Save Sponsors will fund energy assessments that explore energy efficiency and electrification on site
• A Pathway is under development to work on existing building commissioning by optimizing building performance of building systems
• A community populated Spreadsheet compares the electrification costs per square foot for existing building projects and brings to light why certain projects are higher in cost than others, ultimately displaying the need for strong funding incentives and resources to support the effort.
• Mass Save Sponsors propose a hybrid approach to reducing embodied carbon in new homes/buildings and major renovations, combining both a materials based approach and a whole building approach
• The Mass Save Multifamily New Construction Program is being relaunched with three new changes: buildings must be fully electric with the exception of use of greenhouse gasses for water heating, all pathways have a three-tier incentive, and the inclusion of market transformation adders

Ryan Willingham led the conversation about how to approach decarbonization of large commercial & industrial (C&I) buildings.  After reviewing the Mass Save Sponsor installation incentives, which include per-ton heat pump support for retrofits of existing buildings, a deep energy retrofit adder of $1/sf for projects achieving a 40% carbon reduction, and continued emphasis on energy efficiency (Ryan also noted the New Construction and Major Renovation program incentive rates of up to $3.50/sf plus per-ton heat pump adders), Ryan reviewed various technical assistance and planning support options that Mass Save Sponsors intend to make available in the next term for existing building decarbonization.

Ryan explained that Mass Save Sponsors offer energy assessments that explore both energy efficiency and electrification opportunities. They also provide support for in-depth decarbonization studies to assist with BERDO/BEUDO compliance and offer prioritization studies to help building portfolio owners identify facilities and systems for near-term electrification. There is also a process to work on existing building commissioning by optimizing performance of building systems, which is under development and will replace the existing Equipment & Systems Performance Optimization (ESPO) pathway. This pathway is envisioned to be flexible for all systems with a focus on HVAC controls with a modular approach.

The discussion shifted to understanding and addressing cost and other barriers. Jacob Knowles reviewed a detailed spreadsheet completed by various attendees consolidating decarbonization cost data in dollars per square foot across 50+ existing building projects. This spreadsheet, shared with attendees prior to the webinar, included project cost entries from multiple participants to inform the roundtable discussion. Participants provided insights explaining the reasons behind the varying costs. One of the major costs seen across all projects is the need to take space in a building and turn it into mechanical space. Another factor contributing to cost differences is discoveries made progressing through various phases of construction, which often leads to increased expenses as the project timeline advances.

Additionally, the spreadsheet asks for a number of inputs from the participants, such as the building type, level of electrification, and the electrification cost assumption. The electrification cost assumption is self reported with a 1 or 2: 

• 1 indicating that the cost to electrify includes the cost entire cost to electrify, including the cost to replace existing systems necessary to enable electrification, and 
• 2 if the cost to electrify assumes there is separate money allocated to replace the existing systems due to end of equipment life or planned renovation. 

These two categories cannot be perfectly compared, so the distinction is important. From the information provided by the participants, a graph comparing the level of electrification and the electrification cost was created to see how cost can increase with higher electrification, though some projects were successful in keeping their costs relatively low, showing the importance to learn from these projects.

Go to Electrification Cost Spreadsheet

In the discussion on embodied carbon, Kim Cullinane previewed the plan Mass Save Sponsors are proposing to be the first program of its kind in the country to offer support for embodied carbon reduction. The plan focuses on materials with the greatest opportunity for carbon reduction, emphasizes ease of participation and implementation, and is structured to support market actors who may not have considered embodied carbon previously. 

From the research done, there are two major approaches in order to tackle this issue. The first being a materials based approach, where they compare carbon reduction options for specific materials, such as concrete and steel. This approach is straightforward and easy to follow, but it doesn’t always reward design changes that would reduce material use. Alternatively, the whole building approach includes a whole building cost analysis, takes into consideration design changes and building reuse, and has a higher carbon reduction potential, though there are no standardized ways of developing baselines for this approach at the moment. However, there are baselines that are currently in development, which would be majorly beneficial for the future. 

The plan proposes a hybrid approach, because it’s much more realistic to report savings through a materials based approach and because it would be easier for customers and project teams to participate. Customers would submit information to the program showing how much materials they are using and level 3 EPDs for each, so they can calculate the reduction, and offer incentives for those who are providing this information and reducing their embodied carbon. To promote the hybrid based approach, they would additionally offer an adder for those who wanted to complete a Whole Building Life Cycle Assessment (WBLCA), as well as an adder for building reuse.

Joel Martell picks up the conversation focusing on the relaunch of the Mass Save Multifamily New Construction Program. The three major changes to this program are that new buildings must be fully electric to participate (excluding hot water heating), all pathways have a three tier incentive, and the inclusion of market transformation adders. Though projects can use fossil fuels for hot water heating, there are heavy incentives on electric hot water heaters.

The Mass Save 3-year plan aims to advance strong low-carbon methods in building practices. By focusing on decarbonization,  embodied carbon, and updates to multi-family construction programs, the plan is set to contribute significant progress toward a more sustainable future.

Miro Board

Q&A

The Miro Board question and answer pages are provided for roundtable participants to give feedback to the subject matter experts on the information presented and respond to questions asked. Additionally, participants were free to ask their own questions of the experts over mic and chat.

Approach To Decarbonization:

A: The PA approach aligns generally well. Decarb/ECM studies then potentially a LCCA to figure out which ECMs have the greatest impact on total electric demand and energy savings.

A: Decarb master plan is typically where we start currently, so the PA Approach aligns well

A: Incentives in the single-digit $/sf range are too low to move the needle.

A: The past configuration of the Retrofit teams needs to be modified to support typical TA and ESPO efforts. The existing silos need to be removed.

A: Cost-effectiveness calculations should take into account projections in gas and electricity prices. W.r.t. gas prices, the LDCs have conducted substantial analyses of future delivery costs under various scenarios of consumption. In all cases increasing GSEP costs will lead to higher average customer costs for gas. Declining consumption further increases the average. Most of the projections demonstrate that electric heating will become more affordable than gas between 2030 and 2035

A: The incentive is additional, so you can stack them.

A: Right now this is still under development, but current thinking is that there would be a per building amount that we would co-fund, so it would be something similar to what we’re offering for the comprehensive building assessment for each building.

Cost and Barriers to Existing Building Electrification:

A: Complexity factors may vary across customers with the same building typology. Examples of these include:

• Security requirements
• Replacing a major equipment may trigger code requiring additional work
• Electrification may require electrical upgrades like switchgear capacity increase, etc.

A: Education for clients / owners…from actual people who have used these technologies or made the switch (especially for O/M personnel)

A: Backup power and redundancy for heat pumps.

A: Condominiums are typically excluded from incentives due to complex ownership structure.

A: Residential homeowners can utilize the 0% interest HEAT Loan up to $10,000 for pre-wx barriers following their HEA. This is not a no-cost service but certainly helps

A: Would be good to extend programs to municipal utilities as they consume over 1/7th of all electricity in MA

A: LDC/Gas Utility Forecasts show that by 2030-2035, electric heating becomes operationally more cost effective due to GSEP costs alone

Embodied Carbon

A: We are seeing a wide range of WBLCA soft costs:  For one new construction project, the quotes ranged from $12k to $30k.  While other design firms are including it as a standard practice as part of overall design fee.

A: This is very dependent on the lower carbon materials you are studying- concrete, insulation, drywall, etc. Any premium to reduce embodied carbon is largely a material cost, not installation, labor, etc.

A: bidders not being familiar with “new” materials or structural systems (like mass timber / CLT in rural areas) so bids are coming in over budget

A: Hiring additional staff to track and document carbon accounting

A: A minimum incentive should cover the soft cost of doing a WBLCA, PLUS an additional amount to do multiple iterations in order to study different lower carbon material options. Similar to the Passive House incentive for a feasibility study.

A: Time for firms to update specs to be more performance-oriented to include GWP targets for lower embodied carbon products

Residential New Construction/Multifamily

A: Perceived costs/increases

A: There aren’t any specific incentives for on site renewables, such as solar energy, but there are incentives for Net Zero Ready buildings.

A: While the legislation hasn’t changed, we receive carbon reduction goals from the EA to meet per term.

Resources

• Mass Save 2025-2027 Three Year Plan
• C&E Roundtable Miro Board
• Costs and Barriers Spreadsheet
• Current Mass Save Programs and Services
• EPA Grants Related to EPDS and Embodied Carbon
• BE+ Road to Net Zero
• BE+ Carbon & Energy Community Roundtables