For Kyle Murray, an energy efficiency advisor to the state, the proposed $5 billion price tag for the next three-year Mass Save plan is both too much and not enough.
Mass Save, the utility company-run energy efficiency program central to Massachusetts’ ambitious climate goals, has helped the state become a top energy saver in the country — money well spent, Murray feels.
But it’s utility ratepayers primarily footing the bill, the same ones who have stared down sky-high electricity and gas increases in recent years.
“The (Mass Save) programs need to be ambitious, they need to probably go further, but we can’t continue to put that on ratepayers,” said Murray. “If we’re going to be a leader and continue to be ambitious, we need to find other ways of financing these programs that aren’t solely on the backs of ratepayers.”
Christopher Porter, director of customer energy management at National Grid, one of the utility companies that sponsors Mass Save, emphasized that people realize the bang for their buck by participating in the program’s offerings, which include no-cost home energy assessments and rebates to upgrade heating and cooling infrastructure.
Porter said the millions of ratepayers supporting the proposed $5 billion in spending for 2025-2027 stand to gain approximately $14 billion in benefits — largely future energy bill savings.
But data has long shown that low- and middle-income ratepayers don’t take advantage of Mass Save the way higher-income households do. Because of that, the utility sponsors say they’ve placed an emphasis in their next plan on communicating with lower-income households.
Lurking in the background is the future possibility of major structural reforms to Mass Save, which some state lawmakers believe shouldn’t be administered by utility companies.
What is Mass Save and how is it funded?
Every three years, the state’s electric and gas utilities that sponsor the Mass Save program — Berkshire Gas, Cape Light Compact, Eversource, Liberty, National Grid and Unitil — are required by law to submit a plan demonstrating how they’ll continue to incentivize energy efficiency and assist the state in meeting its greenhouse gas reduction goals.
Mass Save, which has seen its funding grow by nearly $3 billion since 2013, is funded primarily by energy efficiency surcharges on all monthly gas and electric bills for customers of the Mass Save utilities. In return, the program offers them a slate of incentives to weatherize and decarbonize their homes and businesses.
For an average customer who uses 600 kilowatts of electricity per month, they pay about $18 monthly, totaling just above $200 per year.
For a typical gas customer who uses about 500 therms per year, the annual cost is approximately $150.
About 11% of Mass Save’s funding also comes from Regional Greenhouse Gas Initiative auction proceeds.
Porter said the growth in Mass Save spending represents “the evolution of our programs, and what is really the expansion of our mandate and what the state is expecting of our programs.”
Since 2013, the Mass Save program has:
- Weatherized approximately 350,000 homes
- Supported installation of heat pumps in over 75,000 homes and businesses
- Provided $6.7 billion in customer incentives
- Reduced greenhouse gas emissions by 3.7 million metric tons of carbon dioxide equivalent
- $31 billion in total benefits to customers
According to the draft 2025-2027 plan, in those three years alone, the program plans to:
- Weatherize 174,000 homes
- Support the installation of heat pumps in over 115,000 households
- Provide over $3.5 billion in customer incentives
- Reduce greenhouse gas emissions by 1 million metric tons of carbon dioxide equivalent
- $13.8 billion in total benefits to customers
Massachusetts spends more than any other state on this program
The approximate $5 billion proposed for the next plan — released on April 1 and currently making its way through initial vetting stages — dwarfs energy efficiency spending in other New England states and tops even similar programming in California, the most populous state in the U.S.
In the Golden State, which has nearly 40 million residents to Massachusetts’ 7 million, regulators approved $4.3 billion last June in energy efficiency investments for 2024-2027.
If approved by the Massachusetts Department of Public Utilities, the next three-year plan would represent a 25% increase from the 2022-2024 plan, which was around $4 billion. That’s on top of a $1.4 billion increase from the previous iteration of the plan for 2019-2021, which was funded at $2.6 billion.
A final version of the 2025-2027 plan is due at the end of October.
“That is the largest such program in the United States,” said Mark Dyen, a climate and energy consultant involved with the Jewish Climate Action Network, Gas Transition Allies and 350Mass. “Not per capita, actual number. We spend more money on this sort of thing than any other state… People will say this is the biggest program in the country, it absolutely is.”
The investments so far have brought attention in the form of national rankings that consistently put Massachusetts within the top most energy efficient states in the country.
In May, Forbes named the Commonwealth the most environmentally-friendly state in the nation, and from 2011 to 2019, it held the No. 1 spot in the American Council for an Energy-Efficient Economy’s state scorecard rankings. In 2022, it was ranked No. 2, falling behind California.
How did we get here?
The groundwork to create Mass Save started in 2008 with passage of the Green Communities Act, legislation that required gas and electric distribution companies and municipal aggregators in the state to develop energy efficiency plans.
Since its inception, ratepayers have been the primary source of the program’s funding via their monthly bills.
Energy efficiency has historically been Mass Save’s bread and butter — home energy assessments and audits, insulation, window sealing, energy-saving appliances, smart thermostats and LED lighting.
The Mass Save program has historically focused on energy efficiency measures such as weatherization. Today, its mandate has expanded to decarbonization. (Mass Save sponsors)Mass Save sponsors
But in light of Massachusetts’ statutory climate commitments to reduce greenhouse gas emissions by at least 85% from 1990 levels by 2050, among the most aggressive in the nation, the program’s mandate has expanded.
While the energy efficiency costs tended to be “measured in the hundreds, the overall price tag now is in the thousands and tens of thousands of dollars per household,” according to Porter, of National Grid.
For example, Mass Save offers between $10,000 and $16,000 in rebates for whole-home heat pump installations based on household income level.
Those increased investments are reflected in the latest plan proposal, along with “significant allocation of resources” dedicated to driving customer adoption of heat pumps at a pace consistent with the state’s climate goals.
Of the nearly $5 billion proposed, Porter said, approximately 70% would go directly back to participating customers in the form of incentives and rebates “to offset the higher upfront cost of this equipment.”
The initial costs of new energy tech can be one of the biggest deterrents to adoption. One of Mass Save’s mounting challenges is communicating benefits down the line to customers, ones they wouldn’t necessarily see immediately — such as decarbonization of their home, reduced energy consumption and money savings — as well as reaching the customers who stand to benefit most from making the transition to electrification.
“This budget is the necessary tool in order to enable that outcome,” Porter said. “What it reflects is that we’re fortunate to live and work and operate in an environment where the political and regulatory will exists in order to provide customers with the resources.”
A heat pump compressor pictured next to a house.Dave Killen / The Oregonian
‘Is the Mass Save price tag too big?’
Brooks Winner, a senior clean energy specialist for the Metropolitan Area Planning Council, wrote a blog post in late April asking, “Is the Mass Save price tag too big?”
“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,” Winner wrote. “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.”
Those concerns reflect sentiments from Murray, the Massachusetts program director for the Acadia Center who serves on the state’s Energy Efficiency Advisory Council, which helps design the Mass Save plan every three years.
Murray said some have advocated unsuccessfully for the use of federal American Rescue Plan Act dollars as supplemental Mass Save funding. He noted the state is currently working on a Clean Heat Standard that would bring in revenue by incentivizing electric heating systems and disincentivizing other polluting fuel types.
“There’s a lot of ways the state could get creative to help deliver on its ambitions,” Murray said.
Creativity is desperately needed, he contends, especially when some talk about pushing the budget even higher to achieve greater climate outcomes, something he’s heard during the ongoing input process for the 2025-2027 plan.
Still, Murray hailed the benefits expected to be generated by the proposal: approximately $13.8 billion, about $3 billion more than the inflation equivalent from the 2022-2024 plan.
“I think it does show that our priorities match up with our ambitions,” Murray said. “We want to be a leader on climate in the Northeast and through the U.S., and we are a leader. These programs all have to be cost-effective, at least deliver a 1-to-1 return for the state. Not only that, we’re going well beyond. We’re expected to get over $13 billion in benefits.”
