As legislators squabble
over whether to extend a payroll tax cut that affects millions of middle income households, nary a word is uttered over another way to financially benefit those same families.
Slashing energy bills.
President Obama's $4 billion retrofit plan
helps, but more is needed. Families that earn $32,500 to $72,500 per year account for about one-third of total energy use in the United States, but rallying those households to take steps to cut that consumption - and thus their bills - is tough. It is difficult, in part, because those improvements have to be paid for, and families have other financial priorities.
"It's really difficult to motivate them to invest in improving the efficiency of their homes, and to overcome the up-front cost barrier once they are motivated," said Mark Zimring, a researcher at Lawrence Livermore National Laboratory, which has identified ways
to deliver savings on those same utility bills.
Buildings make up 70 percent of all energy use and 40 percent of all carbon emissions, so reducing power consumption eases demand on the power grid and benefits the environment, as well as the pocketbook. In fact, the savings may be greater than some estimates. Some ambitious retrofits are achieving energy savings of up to 80 percent. What a cost reduction that would achieve! Read more here
An energy audit of my 1,400 square-foot house near Fresno, CA., led to a low estimate of $1,700 (after rebates) worth of retrofits that would shave $50 per month off my bill. The Berkeley researchers note that $5,000 is a more common starting point in more comprehensive home-energy upgrades, and that is too much for many people to rationalize in this economy.
"...Higher income households are simply better positioned financially to take advantage of these programs," researcher Merrian Borgeson said. "Persuading middle-income households to undertake these whole-home improvements has proven challenging, and with declines in median income and home equity - coupled with rising energy costs - that challenge has become more acute."
So, what to do? The folks at the Berkeley lab have some ideas for utilities, governments and other agencies that promote efficiency:Solve a problem that households recognize. Messaging matters, so frame energy efficiency as an investment in the home, as an opportunity to replace aging equipment or to address safety issues;
Offer options, from low-cost ones that seal leaks, add insulation and repairs ducts to more expensive replacement of air conditioners, furnaces and others;
Middle-income families need programs that pay for themselves. Consider tiered packages and financial incentives based on income;
Offer innovative financing methods, such as loan repayments tied to utility bills, property tax and paychecks;
Leverage other public programs and funding, such as neighborhood revitalization, housing rehab and others;
Governments can adopt energy labeling, and make energy efficiency more visible and valuable in the home real estate market.
Energy efficiency has been called the "low-hanging fruit" of the clean-energy movement because a relatively minimal investment can reap huge rewards. Paybacks are often quick - often only a few years - and the savings don't stop when costs are recouped. I estimated that my savings would equate to an investment that yields a 9 percent return, while a scientist cited in this blog post reduced his monthly power bill from $400 to $50.
The city of Fresno crunched utility data and determined that a 30 percent across-the-board reduction in energy use would pump $260 million into the local economy. (More in this blog post.)
That's just one city. Imagine the financial boost if that was nationwide.
Photo by Jaycy Castaneda