Frequently Asked Questions

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General

A microgrid is a local electrical network that includes:

  • one or more small power plants (in this case solar electric PV panels on rooftops),
  • a means of storing this electrical energy (such as batteries),
  • electrical cables, and
  • a control system to distribute and monitor the energy, and
  • appliances that consume this energy, such as residential space heating and cooling, water heating, clothes washers/dryers and dishwashers.

If there is a power outage, the microgrid can supply power to the homes that are connected.

The Oakland EcoBlock is a neighborhood retrofit to demonstrate a block-level microgrid as well as efficient energy and water home upgrades, funded primarily by the California Energy Commission. The EcoBlock design includes advanced efficiency measures, a solar-powered microgrid, shared electric vehicles, and a new approach for coordinating these resources among neighbors. The idea is that by combining technologies, standardizing components and creating a neighborhood collective with the right legal and financing structure, investments like these can be made affordable for everyone.

The benefits to each participating home are: better comfort (more insulation, reduced leaks, less drafts), improved inside-air quality (fewer pollutants due to combustion of natural gas appliances in the home), and less energy and water waste with new appliances and fixtures. Benefits to the block community includes increased energy reliability (electricity during power outages) and access to shared Electric Vehicles at low cost. The benefits to Society will be reduced greenhouse gases and a guide for others to create their own EcoBlocks.

The current scope of the project covers:

  1. Energy efficiency retrofits (floor and attic insulation, weather sealing (doors/windows), Heat Recovery Ventilator, replacing exhaust fans with efficient models, replacing gas-fueled space and water heating and clothes drying appliances efficient electrical equipment/appliances, smart thermostat, LED upgrades, ceiling fans).
  2. Water efficiency retrofits: laundry-to-landscape greywater system, water-efficient dishwasher and clothes washer replacement, water-efficient fixture replacement (toilets, lavatories, faucets).
  3. Solar electric (electricity-generating) photovoltaic (PV) panels for each roof, sized to collectively meet 100% of the electrical demand on the block.
  4. Neighborhood shared energy storage, with one larger central battery and optional additional smaller batteries to create a single virtual resource. (Comment: The project originally considered using flywheel storage, which is a promising new technology, but found that this would not physically fit well at our particular pilot block site.)
  5. Microgrid-powered charging stations for shared electrical vehicles (likely two or three for the pilot block).
  6. A microgrid control infrastructure for coordinating supply and demand and optimizing the use of available resources across the entire block.
  7. Legal, regulatory, and financial innovation to facilitate this and future projects.

The project is expected to last four years, and began October 2019. The construction phase of the project is expected to last 4-6 months beginning in late 2022, which may increase traffic during some hours to this block and neighboring blocks. The schedule is approximately:

  • Year 1: Recruit participants, conduct water and energy review or assessment of buildings, develop preliminary design
  • Year 2: Develop construction design and obtain permits
  • Year 3: Conduct energy and water improvements, install microgrid, and commission
  • Year 4: Conduct performance evaluation and create guidebook to develop future EcoBlocks

For those on the block who are NOT participating, there are no costs or responsibilities, but there will be an opportunity to provide input on any work done in the public right of way, such as the location of EV chargers and any work to reduce pavement or add plants/trees in the sidewalk planting strips.

For the participating homeowners, there is no cost for the improvements within the home and sidewalk planting strips. There will be a cost when the project ends beginning June 1, 2023 if the block chooses to continue the operation and maintenance of the microgrid powering the homes and EV chargers; the goal is that this cost is equal or less than the current costs of energy and water, and car maintenance. (At the end of the project, the homeowners may choose to go back to PG&E power.) Responsibilities include committing time to work together, learn and participate in the EcoBlock, partnering with neighbors in a “Trust” organization, the potential to continue to maintain and operate the shared microgrid.

Participation

The research team will help the participants develop an organization called the “EcoBlock Trust,” of which property owners are members; a 5-member board could be created to allow representation from tenants, technical experts, and so on. This Trust will be responsible for the shared assets (such as energy storage, microgrid control, solar panels, and EV charging) that are collectively owned by the participants. There will also be a method of collecting the necessary funds for continued operation, maintenance, and insurance after the project ends. The details of how the EcoBlock Trust will operate are being developed with input from the block participants.

Your house will qualify to participate if it is located within the boundary of the pilot block, if it meets the requirements of the audit, and while the project has sufficient funds.

Financial and Legal Issues

A CFD is one legal option to ensure that the ongoing maintenance of the equipment will be covered after 2023; the project team is also exploring fees collected by the Trust. In this case, the participating owners would form a Community Facilities District, also known as a Mello-Roos District, and pay an annual special tax. We are working with one of California’s leading public finance firms to specify the terms of creating such a district for the first EcoBlock. For future EcoBlocks, the funding would have to cover both the initial infrastructure financing and the ongoing costs, a much more substantial commitment. Since this pilot Oakland EcoBlock project has the benefit of CEC funding and multiple sources of cost share for the initial construction, the CFD would only have to cover ongoing operation and maintenance. 

It will depend on whether the code compliance issues are an urgent matter of health and safety. The guiding philosophy, endorsed by the City of Oakland, is that nobody should fear the consequences of having their home assessed, but we also want to help ensure everyone’s safety. The project team is available to discuss specific concerns with you, and our experienced contractors can help you identify any serious issues. It is not the intention of the City of Oakland to remove units from the rental market, however, rental units must comply with basic life and fire safety regulations.

The energy upgrades are expected to substantially reduce the annual energy bill. In place of the usual energy bill, each EcoBlock house will have an annual contribution to pay for the operation, maintenance, and insurance for the shared microgrid. If that contribution is collected through a property tax in a CFD or fees to a Trust, the landlord will be paying it. The landlord may pass these costs on to the renter, who is benefitting from the improvements and the reduced bills (assuming utilities were not previously included in the rent). This should not increase overall costs for the tenant. The goal of the project is to share the costs and benefits of sustainability in a way that creates realistic incentives for all participants.

Learn more about allowable rent increases in the City of Oakland

As a homeowner, you will receive EcoBlock retrofits to your home as a gift. You will not be responsible for the cost of equipment, installation, or service during the project period. However, you will begin to make a payment, such as monthly fees to the Trust or annual fees as a CFD special tax, for the purpose of guaranteeing the ongoing maintenance of the equipment after the project ends in 2023. You will not receive compensation for any time you spend, or for any risk you take by participating in the project.

While researchers have analyzed the projected savings from various EcoBlock measures and considered them favorable, we cannot know future electricity, gas, and water rates. We also cannot know exactly how your utility usage may change over time. Therefore, it is impossible to guarantee a specific amount of savings. The expectation is that your utility savings should be substantially greater than the payment (e.g. CFD special tax) you are assessed. The project team will work with the neighborhood to determine the maximum payment that could be assessed. This maximum may not be charged in any given year, but will be disclosed, for example, to title companies or future buyers of your home. Note that the intention of the project is to make EcoBlocks affordable even without a subsidy like the $5 million spent by the CEC on your block. Therefore, ideally, your utility savings should be large enough to pay for the entire capital investment of retrofitting the block — not just the operation and maintenance. Participating in the EcoBlock will not interrupt the relationship with the utility or require owners/residents to pay energy bills to any other parties.

We’d like to think that improved insulation and new appliances will increase the property value of your house, but we cannot know the future of real estate markets in general, or specific property values.

The impact of the energy and water improvements to each home’s tax assessment is expected to be minimal. Remodeling and repair that are part of normal maintenance or cosmetic are not considered assessable; neither is replacing fixtures and appliances. Solar panel installations are excluded from reassessment.

Learn more about home improvements and property taxes

The shared infrastructure will require funds for maintenance and insurance after the system is installed, tested and commissioned, and after the project is completed in 2023. If the homeowners decide to use a Communities Facilities District (CFD), this provides a secure means of assessing all the participating neighbors an annual fee, based on the ability to pay and amount of shared resources at each property, over the lifetime of the microgrid (e.g., 10-30 years). As a property tax line item or lien, residents pay through their taxes, similar to assessment district financing. The project expects savings from reduced energy and water bills of each participating household as $500-1000+/year; this is expected to outweigh the annual fee.

The equipment and shared infrastructure will be part of your property title just like other improvements, easements, or memberships in homeowner’s associations. Assuming a CFD is the vehicle for supporting the EcoBlock’s maintenance, the homeowner would need to disclose this tax lien at time of resale. Although the efficient appliances are a gift to the homeowner, because the microgrid and storage are sized based on efficiency of all the homes, appliances are intended to remain with the house. The Trust agreement will likely include a stipulation that if an appliance is removed, it will be replaced with one of equivalent efficiency.

In general, the team anticipates working within the public right-of-way (e.g., sidewalk space) for the shared infrastructure. But certain conditions may require easements. We are working on a more complete answer to this question.

Entering the EcoBlock will have no direct effect on your rights as a renter or your relationship with your landlord. It is possible that your landlord may pass some costs through to you in rent, but the goal of the project is for savings to exceed costs. Your rights as a renter will continue to be protected under the existing applicable laws and ordinances. Note that the City of Oakland intends to make this model of urban development attractive and sustainable for all, owners and renters alike.

The project team members are not tax advisors. However, it is our understanding that since individual property owners will not pay the costs of purchasing or installing the panels in the pilot project, they will not be able to claim any tax credits. Solar tax credits are only available to the party that makes the expenditure for the panels and installation.

The EcoBlock Trust will be responsible for the shared components, including rooftop solar panels, using funds collected through either a CFD special tax or fees or other means. Some of that responsibility, including technical maintenance, can be contracted out to a qualified third party. The Trust will be insured for any unforeseen events (including liability, fire and earthquake damage). Participants will maintain their connection to PG&E, so if for any reason they decide to abandon the EcoBlock Trust and microgrid in the future, they can continue to use PG&E power as before. Home appliances will belong to each property owner and covered by manufacturer’s warranty.

The details of the electric tariff between the microgrid and PG&E are still being worked out with PG&E. Essentially, the EcoBlock Trust will represent a single entity that exchanges power with PG&E’s distribution grid, but the specific rates have not yet been determined.

Internal to the microgrid, participants will share costs based on their maximum and average electric usage. The project team will recommend a procedure for determining these contributions, which can be modified with input from the participants. The participant agreement will also include a process for prioritizing the most important energy uses and limiting others when the microgrid is operating in island mode, e.g. during a power shutoff or other emergency, to make sure that the available energy storage is used to greatest benefit.

Technologies

The number of EVs (1-3) will be determined after conferring with block residents about their needs and wants, to ensure that they are well utilized and not occupying parking spaces without offering value for block residents. Some residents may find it no longer necessary to own and park another car, which would offset the impact on overall parking availability.

The plan is to initially limit usage to block residents to make sure they have all the access they need. If residents wish to allow others in nearby areas to use them, this can be discussed and decided upon.

Like a refrigerator or air conditioner, heat pumps work by circulating a working fluid inside, with evaporation coils that cool and condensation coils that warm their surroundings — except that the heat pump cools the outdoor air and deposits that heat inside your house. This takes much less energy than converting electricity or natural gas into the same amount of heat. Heat pumps work best if the temperature difference between inside and outside is not too great, so California’s climate is ideal for them (as compared to places with temperatures far below freezing). Some people report that it takes slightly longer to heat your house with a heat pump compared to a gas-fired furnace. On the plus side, heat pumps are quiet, economical and clean. They also eliminate the risk of carbon monoxide poisoning from gas furnaces.

Actually, many of the university researchers and project partners have firsthand experience with these technologies, and are excited to talk about our experiences!