Community Retrofit Aggregation & Financing Tool (CRAFT)

A framework for 'Community-Scale Retrofitting' that enables neighborhoods to bulk-buy retrofits (insulation, heat pumps, solar) with integrated financing, lowering costs and accelerating decarbonization.

Overview

Moving from house-by-house retrofits to a street-by-street or neighborhood-wide approach dramatically lowers costs through economies of scale, ensures quality control, and builds social momentum. This policy establishes the Community Retrofit Aggregation & Financing Tool (CRAFT), a framework designed to support communities in bulk-buying retrofits with integrated financing.

1. Core Mechanism: The “Aggregator” Entity

The central policy innovation is the formal designation and funding of Retrofit Aggregators. Instead of individual homeowners managing contractors, an Aggregator manages the process for a whole group (e.g., 50–500 homes at a time).

Who can be an Aggregator?

Municipalities: (e.g., “City Retrofit Office”)
Non-Profits/Co-ops: Community energy cooperatives or housing non-profits.
Neighborhood Associations: With a registered legal structure.

Role of the Aggregator:

Recruits households to sign a non-binding “Expression of Interest.”
Issues bulk Tenders/RFPs to contractors for specifically scoped work (e.g., “Install 50 heat pumps in the Cedar Heights neighborhood”).
Oversees quality assurance and acts as the project manager.

2. Bulk Buying & Delivery Strategy

To maximize savings and speed, the policy divides retrofits into standardized “streams”:

Stream	Bulk Buy Opportunity	Efficiency Gain
A. The Thermal Shell	Bulk purchase of insulation materials (cellulose, spray foam) and air-sealing labor.	Contractors can do 3-4 attics a day if homes are adjacent, reducing travel/setup costs by 15-20%.
B. The Mechanical Switch	Bulk purchase of Heat Pumps and Heat Pump Water Heaters.	Wholesale equipment pricing (direct from manufacturer) and standardized installation teams.
C. Energy Independence	Bulk purchase of Solar PV panels and Battery Storage systems.	“Solarize” model: Group discount tiers (e.g., “If 50 homes sign up, price drops by 10%”).

3. Integrated Financing Models

The policy solves the “upfront cost” barrier by attaching financing to the property, not the person.

Option A: PACE (Property Assessed Clean Energy)

How it works: The Aggregator (or finance authority) pays the upfront cost.
Repayment: Homeowner repays via a line item on their property tax bill over 15–20 years.
Benefit: If the homeowner sells, the remaining balance stays with the house (new owner benefits from savings and takes over payments).

Option B: On-Bill Financing (OBF)

How it works: The local utility provider pays the contractor.
Repayment: Homeowner repays via their monthly electricity/gas bill.
Constraint: The monthly loan payment must be less than the estimated energy savings (Bill Neutrality).

4. Government Support & De-Risking

To enable this model, the government provides:

Seed Funding: Grants to cover administrative setup costs for Aggregators (legal fees, project manager salaries).
Loan Guarantees: Government guarantees bulk loans taken out by the Aggregator, lowering interest rates (aiming for 0-2%).
Standardized Contracts: Providing “off-the-shelf” legal contracts for bulk purchasing to protect communities from liability.

5. Implementation Pilot: “The Street-by-Street Challenge”

A pilot program to launch the policy:

Apply: Neighborhoods apply to be a “Retrofit Zone” (Criteria: High density of similar housing types, high buy-in).
Coach: Winning neighborhood receives a dedicated “Retrofit Coach.”
Bulk Buy: Coach organizes the bulk buy (e.g., 100 heat pumps).
Renovation Train: Teams move through the street assembly-line style—insulation one week, heat pumps the next.

Summary of Benefits

Feature	Individual Approach	CRAFT (Community Bulk) Approach
Cost	Retail pricing + individual travel/setup.	20-30% discount via wholesale purchasing and clustered labor.
Trust	Homeowner must vet contractors alone.	Aggregator vets contractors; community relies on peer trust.
Speed	One home at a time; scheduling delays.	Assembly-line delivery; teams move door-to-door.
Grid	Random installs strain the grid.	Coordinated battery installs can form a Virtual Power Plant (VPP).