-Title
Approval of a Resolution Authorizing an Interagency Agreement with the Washington State Department of Commerce for a State Home Electrification and Appliance Rebates Program Grant
Recommended Action
Committee Recommendation:
Not referred to a committee.
City Manager Recommendation:
Move to approve a resolution authorizing an interagency agreement between the City of Olympia and Washington State Department of Commerce for a Home Electrification and Appliance Rebates (HEAR) Program Grant.
Report
Issue:
Whether to approve a resolution authorizing an interagency agreement between the City of Olympia and Washington State Department of Commerce for a HEAR Program Grant.
Staff Contact:
Dominic Jones, Building Decarbonization Program Manager, Office of Community Vitality, 360.753.8347
Presenter(s):
None - Consent Calendar Item
Background and Analysis:
Washington State Home Electrification and Appliance Rebates Program
The Washington State Home Electrification and Appliance Rebates (HEAR) Program provides grants to eligible third-party administrators to provide rebates and incentives to households and small businesses to purchase and install high-efficiency electric equipment and appliances. The HEAR Program is supported with funding from Washington’s Climate Commitment Act (CCA). The CCA supports Washington’s climate action efforts by putting cap-and-invest dollars to work reducing climate pollution, creating jobs, and improving public health.
In June of 2024, the City of Olympia was awarded $481,483 in HEAR Program funding to administer rebates for heat pumps and other high-efficiency electric equipment with a focus on low- and moderate-income households. The City will administer these rebates through the Energize Olympia Program to provide approximately 20-30 full cost coverage heat pump heating/cooling retrofits for income-qualified households. Heat pump retrofits will have multiple benefits for program participants such as reduced energy bills due to equipment efficiency, improved occupant comfort, and access to cooling.
Energize Olympia
Energize Olympia is a heat pump group purchase program that makes it faster, easier, and more affordable for Olympia residents to purchase and install ductless heat pumps. The program supports residential ductless heat pump retrofits through educational workshops and program-exclusive incentives for City of Olympia residents including:
• Guidance on relevant incentives and financing.
• Installation and a free site assessment by a vetted local installer.
• A group purchase discount of 10%, up to a maximum of $1,200, off a qualified ductless heat pump installation.
• Fully subsidized heat pump installations and weatherization services for low- and moderate-income households up to 120% of Area Median Income (AMI).
• An additional $800 Energize Olympia rebate for the first 50 self-funded program participants.
Fully subsidized installations for low- and moderate-income households are provided through a partnership with South Puget Sound Habitat for Humanity (SPSHFH) and funded through several grant programs including the Washington State Home Electrification and Appliance Rebates Program (HEAR), the Department of Housing and Urban Development Community Development Block Grant (CDBG) and the Washington State Community Energy Efficiency Program (CEEP).
Program goals for the 2024 Energize Olympia program include:
• Engaging at least 550 residents of Olympia via online and in-person community workshops.
• Supporting 150 ductless heat pump installations, including at least 75 fully subsidized installations for income-qualified households.
Climate Analysis:
The Thurston Climate Mitigation Plan (TCMP) identifies reducing energy use in existing residential buildings and converting to cleaner fuel sources as key strategies for local action to reduce greenhouse gas emissions (See TCMP Strategies B1 and B6).
Building energy efficiency and building electrification are also identified as key strategies in Olympia’s 2021 Community Greenhouse Gas Emissions Reduction Strategy Analysis. To achieve Olympia’s 2030 and 2040 emissions reduction targets, 100% of Olympia’s existing buildings must receive energy efficiency retrofits and electrification retrofits between 2024 and 2039. Achieving this target would require 6.25% of Olympia’s existing building stock to receive energy efficiency and electrification retrofits per year.
Providing incentives for the installation of ductless heat pumps provides a long-term reduction in greenhouse gas emissions through reducing energy use and encouraging electrification in existing residential buildings. --
Equity Analysis:
The HEAR Program Grant directly benefits low- and moderate-income households up to 120% AMI through 100% cost coverage installations of ductless heat pump equipment.
Providing energy efficiency retrofits to low- and moderate-income households directly supports energy equity by removing the barrier of high up-front costs for equipment and installation, as well as reducing long-term energy use and lowering energy bills. In addition to reducing energy burdens, ductless heat pump and weatherization retrofits offer resilience co-benefits including access to cooling, as well as improved comfort and indoor air quality.
Neighborhood/Community Interests (if known)
Since the Acceptance of the Thurston Climate Mitigation Plan in February 2021, community members have continued to urge the City to take immediate action to address climate change. Many community members have specifically requested that the City develop and fund local programs to support energy efficiency and electrification retrofits.
The Energize Olympia 2023 pilot program provided 67 heat pump retrofits including 22 fully subsidized installations for low- and moderate-income households. Demand for fully subsidized installations in the 2023 program exceeded program funding, and 43 participants were put on a waitlist to receive a heat pump installation during future iterations of Energize Olympia dependent on additional program funding. The high number of low- and moderate-income households on the Energize Olympia 2023 waitlist directly indicates strong community interest in additional funding for fully subsidized heat pump installations.
During program outreach at community events during June through August 2024, several community members shared ideas for how they’d like to see grant funding distributing in current and future programs. Some of the requests included increasing the income qualification limit for fully subsidized installations, providing equipment service plans for fully subsidized installations, and providing incentives for a broader range of equipment, such as portable heat pumps, ducted heat pump systems and heat pump water heaters.
• Staff recommend maintaining the 120% AMI income-qualification limit for HEAR funding to maximize the quantity of fully subsidized installations for lower income households.
• Additional equipment such as ducted heat pumps and heat pump water heaters are under consideration for Energize Olympia 2025 in coordination with the Thurston Climate Mitigation Collaborative’s Regional Energy Efficiency and Electrification Campaign.
• Although demand is high, incentives for portable heat pump equipment and equipment service plans are not eligible for reimbursement through the HEAR Program. Equipment suitable for renters may be considered for future heat pump incentive programs if funding for such equipment becomes available.
Financial Impact:
The City has been awarded a $481,483.00 grant to administer a rebates and incentives program for high-efficiency electric equipment and appliances. HEAR Program Grant funds must be spent by June 30, 2025. Up to 15% of the grant funds may be allocated towards program administration, outreach, and education, including staffing costs for program implementation. The remaining 85% of grant funds will be allocated towards fully subsidized heat pump installations and electrification retrofits for Olympia households earning up to 120% AMI (area median income).
There are no match requirements to receive this grant.
Options:
1. Approve a resolution authorizing an interagency agreement between the City of Olympia and Washington State Department of Commerce for a Home Electrification and Appliance Rebates Program Grant.
2. Approve a resolution authorizing an interagency agreement between the City of Olympia and Washington State Department of Commerce for a Home Electrification and Appliance Rebates Program Grant with amendments.
3. Do not approve a resolution authorizing an interagency agreement between the City of Olympia and Washington State Department of Commerce for a Home Electrification and Appliance Rebates Program Grant.
Attachments:
Resolution
Agreement