Want to raise returns without raising rents? In McFarland’s cold winters, the right energy upgrades can cut owner‑paid utilities, improve comfort, and make your property more attractive to renters and buyers. If you are eyeing a sale soon, smarter systems can also help your listing show better. In this guide, you will see practical steps, local incentives, and financing options that can boost NOI on single‑family rentals and small multifamily buildings. Let’s dive in.
Why NOI gains are local in McFarland
McFarland is served by Madison Gas & Electric, so your savings depend on MGE’s actual rate structure, including optional time‑of‑use pricing. Reviewing the current MGE residential rate schedules helps you forecast payback more accurately than national averages.
Winters here drive heating loads, which means upgrades that reduce heat and hot‑water costs usually deliver the biggest NOI lift. Start with improvements that lower winter demand, then use rates and controls to manage electric costs year‑round.
High‑impact upgrades that pay
Cold‑climate heat pumps
Modern cold‑climate air‑source heat pumps can reduce heating energy versus older systems when properly sized and installed. Evidence shows strong savings potential in many cold‑climate retrofits, especially when replacing inefficient electric or oil heat according to national research. In McFarland, pair the upgrade with Focus on Energy heat pump rebates and follow MGE’s heat pump guidance for best results.
Heat pump water heaters
Water heating is a steady year‑round expense. Heat pump water heaters use far less energy than standard electric units and often have short paybacks in many homes, as noted by the U.S. Department of Energy’s analysis of new standards and savings potential in this overview. In rentals, lower owner‑paid hot‑water costs can translate directly into higher NOI.
Insulation and air sealing
Air sealing and proper attic insulation reduce heating load and make heat pumps perform better during cold snaps. They are foundational upgrades that improve comfort and cut winter peaks. See Focus on Energy program requirements to plan scope and rebates.
Smart controls and time‑of‑use
Smart thermostats, zoning, and scheduling help you use less energy and can shift usage to off‑peak times if you enroll in time‑of‑use. Check MGE’s rate options to decide whether TOU aligns with your usage patterns.
LEDs and efficient appliances
LED lighting and ENERGY STAR appliances are low‑disruption, fast‑payback upgrades. They are a good first step if you want quick NOI gains and minimal tenant impact.
Solar, where it pencils
Solar can reduce long‑term electricity costs on owner‑paid meters. Payback depends on roof conditions and rates, so model with your property’s usage and MGE’s current rate structure before you commit.
Multifamily essentials
For 5+ unit properties, look beyond in‑unit changes. Central plant upgrades, common‑area LEDs and controls, and submetering can drive sizable savings. Focus on Energy offers multifamily‑specific guidance in this practical resource.
Incentives and financing to know
- Focus on Energy. Qualifying McFarland projects can access instant discounts and rebates for heat pumps, HPWHs, insulation, and more. Start on the program page and work with Trade Ally contractors.
- MGE programs and rates. Use the MGE rate schedules to model savings and consider TOU enrollment where it fits.
- Federal tax credits. The federal Energy Efficient Home Improvement Credit and Residential Clean Energy Credit may apply. Rules changed in 2025, so verify current eligibility on the IRS credit page and consult a tax professional before finalizing your pro forma.
- C‑PACE for multifamily or commercial. Dane County participates in PACE Wisconsin, which can fund long‑term, energy‑saving upgrades on 5+ unit or commercial properties. Learn more from PACE Wisconsin.
How to model NOI impact
A simple way to think about it:
NOI change = reduced owner‑paid utilities + any rent premium or vacancy reduction − annualized project cost after incentives and financing − any added O&M or tax impacts.
Use this five‑step approach:
- Gather 12 months of electric and gas bills for each meter.
- Get a targeted energy audit that includes air leakage testing and insulation review. Focus on Energy’s Trade Ally network is a smart starting point.
- Build a baseline by end use. Separate heating, hot water, lighting, and common areas if applicable.
- For each upgrade, estimate installed cost, incentives, and expected energy savings. Use local rates from MGE in your math.
- Annualize the net cost over the useful life or financing term. Subtract expected savings to see the annual NOI delta.
Permits, assessment, and leasing details
- Permitting and inspections. Confirm permit needs and timelines with the Village of McFarland.
- Assessment. Major upgrades can affect assessments. Check timing and process with the village’s contracted assessor. Start with the village’s FAQ and contacts.
- Leasing. Decide whether utilities remain owner‑paid or shift to metered or submetered billing. Align changes with lease terms and local regulations.
Quick start checklist
- Start with an energy audit and insulation plus air sealing.
- Price cold‑climate heat pumps and heat pump water heaters.
- Check Focus on Energy rebates and verify federal credits on the IRS site.
- Model savings with MGE rates and consider time‑of‑use.
- For 5+ units, review multifamily strategies and explore C‑PACE financing.
- Plan tenant communication and lease updates ahead of work.
- Track post‑upgrade bills for 12 months to verify results.
Ready to evaluate your property?
If you are weighing upgrades before selling or want a clearer read on cash flow for a rental, we can help you think through the market side while you work with energy pros on the technical side. Reach out to The See Team for local guidance on how energy‑smart improvements can support your next move in McFarland.
FAQs
What upgrades boost NOI most in McFarland rentals?
- In our climate, start with insulation and air sealing, then consider cold‑climate heat pumps and heat pump water heaters, and use MGE’s rate options and smart controls to optimize costs.
How do Focus on Energy rebates work for MGE customers?
- If your property is served by MGE, many qualifying upgrades are eligible for instant discounts or rebates through Focus on Energy; work with participating Trade Allies to capture incentives.
Can I finance multifamily upgrades with PACE in Dane County?
- Yes, for 5+ unit or commercial properties, Dane County participates in PACE Wisconsin, which offers long‑term financing tied to the parcel; see details from PACE Wisconsin.
How do I estimate savings using MGE rates?
- Use your last 12 months of bills, model usage by end‑use, and apply MGE’s current residential rates, including time‑of‑use if you plan to enroll.
Do energy upgrades affect my property taxes in McFarland?
- They can influence assessed value; review timing and process with the village’s assessor, starting with the Village of McFarland FAQ.
Are heat pumps reliable during Wisconsin winters?
- Cold‑climate models perform well when properly sized and installed, and research shows strong savings potential in many cases; see the national study on air‑source heat pumps and follow MGE’s best practices.
