U.S. Energy Efficiency Begins at Home

When it comes to taking action on climate change, Americans lack a distinct sense of urgency — and that starts in our very own homes.

Residential energy efficiency is the “low-hanging fruit” for taking action. Over 20% of the United States’ greenhouse gas emissions and energy consumption is from heating, cooling and powering our homes. We don’t need a cap-and-trade system to get the economics of residential energy efficiency to work.

Most of homes in the United States are leaking like sieves. In Atlanta, Georgia, my company, Retrofit America, is able to reduce energy consumption for heating and cooling by 40% to 70% for homes built before 1980 — and by 25% to 50% for newer homes.

An average investment of $6,000 will pay for itself in four to seven years with utility company rebates.

Yet America’s homeowners have been loath to implement simple improvements to make their homes energy efficient — insulating attics and basement crawlspaces, sealing or replacing ductwork, reducing interior air leakage, or upgrading HVAC equipment.

For example, the U.S. Environmental Protection Agency’s Energy Star program accounted for only 50,000 home retrofits in 2011. The EPA noted, “To retrofit one quarter of all U.S. homes at the current rate, it will take over 500 years.”

This is not for want of trying on the policy front. In March 2010, President Barack Obama announced a HomeStar program to offer up to $3,000 in rebates to homeowners for energy efficiency improvements. The House of Representatives passed the HomeStar legislation in May 2010, but it has since remained stalled in the Senate.

Under the White House’s Recovery through Retrofit Program, the Department of Energy created the Home Energy Score program to establish a national standard for rating the energy efficiency of existing homes. The Federal Housing Administration launched a PowerSaver Loan program to finance efficiency improvements.

While helpful, these efforts have proven insufficient to motivate America’s homeowners to take action. Just as the United States has lagged behind the world’s other industrialized countries in taking action on climate change, its progress in adopting residential energy efficiency improvements has lagged its peers.

The UK’s conservative coalition government is now launching its Green Deal, with the goal or making 14 million of the country’s 26 million homes energy efficient with on-bill financing through the UK’s Big Six energy providers.

Canada’s ecoENERGY Retrofit Program, which ran from 2007 to 2012, offered homeowners rebates that resulted in 640,000 home retrofits, 7% of the country’s single-family housing stock.

In France, as in other European countries, energy efficient homes are becoming an established norm. Any residential property that is offered for sale or rent is required to publish an “Energy Performance Diagnostic” score.

Changing homeowners’ mindsets

At a White House presentation in November 2010 to launch the Recovery through Retrofit initiatives, Vice President Joe Biden articulated the Obama Administration’s vision:

Making our homes more energy efficient… is a no-brainer. It saves consumers money on their electricity. It reduces our dependence on foreign oil. It creates jobs. It’s all part of efforts to fundamentally reimagine the American economy by fundamentally changing our approach to energy consumption…. Imagine a country where we have 100 million energy efficient homes. There is no reason on God’s green Earth that we can’t do that.

So what’s standing in the way of achieving this? First and foremost, the mindset of the American homeowner. When it comes to consuming energy in our homes, old habits die hard — especially when they require some up front investment in the midst of the Great Recession.

We at Retrofit America discovered this when the city of Atlanta launched its Sustainable Home Initiative in the New Economy (SHINE) program. With federal stimulus funding, SHINE offered rebates of up to $2,000, in addition to rebates from Georgia Power of up to $2,200.

We distributed one thousand door hangers promoting these rebates in Atlanta’s Grant Park neighborhood, where houses, most of which date from the 1920s, are hardly energy efficient. Only one homeowner responded, who tellingly lived in a 1980s rebuild that was already efficient!

So we started knocking on doors to pitch home retrofits and find out what these homeowners were actually thinking. Right on their front porches, we’d take them through virtual walk-throughs of their homes — from their attic spaces down to their basement crawlspaces — explaining how we could transform their 1920s homes into 21st-century, energy-efficient homes.

Slowly but surely, our approach started to bear fruit. We’ve been carrying out home energy assessments for about one in every five prospects from door knocking and have been converting 40% of those customers to actual home retrofits.

We’re now preparing to augment one of America’s most tried and true sales approaches with state-of-the-art technology. Door-to-door salespersons will carry iPads loaded with a Home Efficiency App.

Leveraging the White House’s Green Button Initiative, which provides a standard protocol for utility customers to access their energy usage data, we’ll be able to tell homeowners how efficiently they heat and cool their homes, just from plugging in their utility data, thermostat settings and their home’s square footage.

We’re betting that when homeowners have this quick and easy way to find out how efficient their homes are — using hard data with comparisons to their neighbors homes that we’ve already retrofit — we’ll start hitting “tipping points” in each neighborhood we target.

Recovering the investment

Will the potential for energy savings be compelling enough for homeowners to take action? And how can we improve on our conversion rate from energy assessment to actual home retrofits?

On average, Americans change homes every seven years, so a four- to seven-year payback period on a home retrofit becomes more attractive if the homeowner is assured of recovering that investment through the home’s resale value.

Today, home appraisers do not have sufficient comparable data through green multiple listing services to assess the value of energy efficiency improvements.

The Sensible Accounting to Value Energy (SAVE) Act — proposed by Senators Michael Bennet of Colorado and Johnny Isakson of Georgia — is a key legislative initiative that would include energy efficiency improvements in home values by instructing federal loan agencies to assess a borrower’s expected energy costs when financing a mortgage.

How does such progress on residential energy efficiency translate into U.S. action on climate change? The United States has historically been the world’s largest emitter of greenhouse gases, but it was recently passed by China as the world’s largest annual emitter.

While Western European countries and Japan are taking action to meet their commitments for emission reductions through 2020, addressing the challenge on a global scale will also require commitments from China and other large emerging markets. This will only be achieved if the United States demonstrates credible leadership through real action.

Over 300 home improvement contractors from 34 states are members of Efficiency First, a trade association for America’s emerging “home performance” sector. They each face the same fundamental challenge: How to convince America’s homeowners to make their homes energy efficient.

Without broad legislation to take on climate change across numerous sectors, these contractors are the “tip of the spear” on U.S. action.

America’s homeowners will not be moved, however, by a clarion call for global leadership. They will be moved by compelling arguments to implement energy efficiency improvements that stop them from spending good money to heat and cool the outdoors and that make their homes right to live in.