Christine Donovan, Senior Advisor & Adam Sherman, Team Lead -
The North Country of New Hampshire is a rural region located in the top third of the state characterized by the White Mountains, a declining wood products industry, and a growing recreation- and tourism-based economy. There is an out-migration of young adults seeking professional jobs and financial stability elsewhere, an aging population, and an increasing number of low-income households making difficult choices between food, housing, energy, transportation, and medicine.
VEIC as “Value Chain Coordinator”
To address these challenges in the region, efforts are underway to reduce energy costs, improve housing stock, and invigorate the local economy. In 2017, one of the largest rurally-designated foundations in the nation—the Neil and Louise Tillotson Fund of the New Hampshire Charitable Foundation—selected VEIC to serve as the “Energy Efficiency Value Chain Coordinator” for the North Country. “VEIC’s more than 30 years of leadership in energy efficiency program design and delivery, its experience working with diverse populations, and its familiarity with rural, cold climate communities, made it a perfect fit serving as the Energy Efficiency Value Chain Coordinator,” said Kirsten Scobie, Director of the Tillotson Fund.
Value Chain Coordinators convene and connect local stakeholders, providing leadership, strategic guidance, and technical support as they work together to solve pressing social, economic, or other local problems. The value chain approach involves developing an understanding of all the components needed to develop and transform a market, mapping the assets currently in place as well as the gaps that prevent successful market development. Mapping results are used to identify and develop new solutions (in either demand or supply) that address and break through the market barriers.
In our role as Value Chain Coordinator, VEIC was asked to use the “Wealth Works” approach to community and economic development. This approach seeks to not only develop and transform markets but to also build community prosperity, or wealth, while doing so. Created several decades ago with funding by the Ford Foundation, the Wealth Works approach involves assessing eight types of capital that constitute a region’s wealth. These include: intellectual, social, cultural, individual, natural, built, political, and financial capital.
VEIC began our work by:
- mapping the region’s energy efficiency value chain;
- conducting a listening tour of over 50 energy, economic development, affordable housing, and political leaders in the region;
- conducting an energy burden study of Coös County, the largest county in the North Country with a population of 30,000; and
- convening two stakeholder engagement workshops to identify areas of focus for addressing value chain gaps.
Energy efficiency value chain
North Country energy burden study
Energy burden is the percentage of income a household spends on energy. Nationwide, household energy burdens are typically between three and five percent. Our energy burden study indicated that the economic prosperity of low income households in the North Country region is greatly impacted by high energy burdens. Coös County households spend an average of $5,730 annually for electricity, heating, and transportation. This is 50 percent higher than the statewide average of 9.4 percent.
Our energy burden study also showed that the energy bill for Coös County is approximately $102 million per year ($32 million for electricity, $37 million for heating, and $33 million for transportation). Given the high level of oil use for heating and gasoline use for transportation in the region, an estimated 80 percent of each energy dollar leaves the local economy immediately to pay for fossil fuels. This represents a significant drain on the local economy, which could be alleviated by increased energy efficiency and greater use of locally, sustainably harvested wood fuels.
Key gaps in the value chain
Despite decades of state- and utility-led energy efficiency and renewable energy initiatives seeking to transform energy markets throughout New Hampshire, the opportunities for local wealth building, economic development, and other societal and environmental benefits associated with clean energy use are clearly not being realized in the North Country.
There is an eight-year waiting list for income-eligible households for the Weatherization Assistance Program. And that is just for those who have asked for help; many more income-eligible households are believed to need such services even though they have not applied for them. Also, despite increased funding for NHSaves, the utility energy efficiency program, market penetration is low in Coös County for all sectors except households eligible for WAP services.
The work ahead for VEIC
Development and implementation of long-lasting, scalable solutions for filling these gaps is the top priority for our second phase of work as Value Chain Coordinator. VEIC’s key areas of focus during 2019 and 2020 will be to:
- Provide new and expanded technical support and fundraising assistance
Many small towns in the region do not have staffing capacity to identify and implement municipal energy efficiency projects or to apply for and administer rebates, incentives, and grant funding available for municipalities. VEIC will work with NHSEA, Vital Communities, , and municipalities to deliver a North Country Energy Circuit Rider Initiative. The Circuit Rider will travel from town to town, providing strategic guidance, technical support, and grant writing expertise for municipal energy efficiency projects. By leading by example, municipalities will help increase demand for energy efficiency by others in the region.
- Increase awareness of and market demand for energy efficiency by middle income households
Although middle (and upper) income households typically have access to savings or loans for making cost-effective energy efficiency improvements, they often do not pursue such projects on their own. And yet the region experiences cold winters and has an old housing stock with many homes needing improvements. VEIC will provide support to the New Hampshire Sustainable Energy Association (NHSEA) and local energy committees as they deliver a new, aggressive “Weatherize the North Country” campaign. Similar campaigns in nearby regions have been successful in catalyzing demand among middle (and upper) income households and expanding business for weatherization contractors.
- Seek $30 million (or more) in additional funding and financing for weatherization of low income households
Major financial support is needed to improve the large inventory of aging, inefficient, homes of people with low or fixed incomes in Coös County. A new initiative is underway to identify innovative ways to finance and deliver energy efficiency and weatherization services to low and fixed income households in the region in a way that complements the Weatherization Assistance Program (WAP) delivered by the local Community Action Program. The program experiences an eight-year waiting list. The new initiative will be designed to complement WAP through an innovative pilot potentially pooling monies from multiple federal, state, and/or private sources.
- Develop new energy efficient, affordable housing options
In addition to improving the existing housing stock in the region, there is a need for new energy efficient, affordable housing for both year-round permanent residents and seasonal recreation and tourism workers. VEIC will work with the local non-profit housing provider, Affordable Housing and Economic Assistance and Development (AHEAD), to develop and deliver an energy efficient, affordable housing initiative to the North Country. The initiative will seek new solutions for both year-round, permanent low-income residents and seasonal employees often barely making a livable wage
Address the aging population, outmigration of young people, declining workforce, and workforce competition. Lucrative second home new construction makes it difficult to find workers for energy efficiency and weatherization work. VEIC will work with Tillotson Fund staff to promote a new scholarship fund for professional training and Building Performance Institute certification for energy auditors and building contractors committed to providing efficiency and weatherization services in Coös County. We will work promote the scholarship to contractors in the region and will seek to leverage the funds with resources from the New Hampshire Job Training Fund.
Beyond the North Country
When this project is complete, VEIC will have worked for a multi-year period on the application of the value chain approach in the North Country. The potential to bring this approach elsewhere to advance energy efficiency in other states and regions is significant and exciting. This is especially true in rural regions across the country that experience large energy burdens. By investing resources wisely, addressing systemic gaps, and strengthening local value chains, increasing community prosperity through local wealth building and job creation can be achieved.