A major retrofit with an eye toward energy efficiency, including energy efficient heating, new windows, installing LED bulbs, improving insulation, replacing roofs and taking other actions to seal the thermal envelope can cut home energy use at least in half, according to an American Council for an Energy-Efficient Economy (ACEEE) study. Residential energy usage averages about 10,632 kWh annually per customer or a total of 21% of overall energy usage.
Deep retrofits would cut household energy use by 58% to 79%, depending on the age of the home, and there is an appetite for making retrofits in order to improve sustainability and energy efficiency. In a poll conducted by HomeServe on LinkedIn, 35% of those surveyed said they were considering replacing or upgrading their home’s insulation, matched by those who expressed a desire to install energy efficient windows, also at 35%, followed by those interested in upgrading to energy efficient heating, ventilation and air conditioning at 30%.
However, the average cost for these retrofits from to $42,600 to $56,750, according to ACEEE – an expensive proposition. In the HomeServe poll, only 15% said they expected to spend more than $20,000, while 25% said they’d spend $10,000 to $20,000, 27% would spend $5,000 to $10,000 and one-third said they planned to spend $5,000 or less on energy efficiency measures. There’s a clear gap between what respondents plan to invest and the investment needed to move the needle on sustainability and energy efficiency.
Additionally, energy prices are the highest they’ve been in more than 40 years, increasing by almost 16% for electricity and 33% for natural gas. Partly driving the cost was a muggy summer that resulted in a record use of residential power in the third quarter of 2022.
Those mounting costs could add to mounting utility debt – U.S. families have approximately $16 billion in utility debt, almost doubled from the end of 2019, with $792 the average amount owed. The National Energy Assistance Directors Association warns that, paired with the rising costs, continued high arrearages will continued to be accrued, despite the additional $4.5 billion added to LIHEAP as part of the American Rescue Plan Act.
In HomeServe’s poll, 53% of respondents said they were interested in making their homes more sustainable and energy efficient to save money on their energy bills, while another 25% said they wanted to help protect the environment and 23% wanted to increase their home value.
Rising energy costs and households struggling with being energy burdened may have influenced the energy efficiency measures poll respondents said they would like to incorporate into their homes – the majority, 60%, were considering rooftop solar panels, followed by a smart device to monitor their energy usage at 16%, a home electric vehicle charger at 13% and a home storage battery at 11%.
Home repair plan programs contribute to energy efficiency because a member with a plan is more conscious of their appliances and, with repairs/replacements covered, more likely to fix inefficient appliances than the average homeowner. Regular tune-ups, included in some plans also keep appliances running efficiently. HomeServe plans protect members against the expense and inconvenience of HVAC, gas and electric lines, water heater and other home emergencies by providing affordable coverage and quality local service from rigorously-vetted network contractors.
To learn more about how you can bring this affordable, energy efficiency program to your members, contact us.
Low- and Middle-Income (LMI) households have historically faced obstacles to becoming more energy efficient, despite the outsized impact efficiency measures would have for this population.
Low-income households pay more than 7 percent of their income on energy bills, three times that of higher income households, and if LMI households could reach average efficiency, their bills would be reduced by a third. However, many LMI households don’t have the savings or the credit to implement energy efficiency measures and aren’t aware of programs and incentives that could make efficiency more affordable.
Programs like the Weatherization Assistance Program and Low-Income Home Energy Assistance Program are operated by different federal departments, and a lack of coordination between programs in some areas make it difficult for LMI households to apply or leverage the programs to the best advantage. For example, if a household is consistently applying for LIHEAP funds, it may be an indication that weatherization would help lower the overall energy bill. However, if the same entity isn’t administering both programs in the community, then that connection made not be made.
Program awareness is made more difficult through a lack of trust in low-income neighborhoods, where predatory financial lenders have made residents wary of free or low-cost measures and there is a reluctance to allow people from outside the community into their homes, said Tony Reames, director of the Urban Energy Justice Lab at the University of Michigan in Ann Arbor. Diversifying the workforce that conducts onsite energy efficiency measures and working with long-standing and trusted community partners, such as community centers or churches, is one way to elicit more trust and participation, he added.
Because of their struggles with affordability, one in five LMI households have reduced spending on food or medicine and 10 percent keep their homes at unsafe temperatures to reduce their energy bill. And, similar to food deserts, energy efficiency is often a costlier or more difficult to procure option in low-income neighborhoods than in more affluent neighborhoods. Many low-income communities have older homes that have not been updated because systemic policies such as redlining, resulting in housing stock that has poor efficiency.
Some states are addressing the financial obstacle by allowing on-bill financing or recovery, which allows rate payers to pay for efficiency upgrades over time, such as New York’s “bill neutral” program, established through the Green Jobs-Green New York Act and the Power NY Act. The two-tier program offers private market loans to those who can meet the credit requirements and a second, utility-financed tier for those who can’t. Those on the utility-financed tier also receive a lower interest rate, based on an area’s median income.
Oregon’s Energy Efficiency and Sustainable Technology Act offers a state loan program with an on-bill financing, that offers loans between $2,000 and $30,000 for efficiency and includes a free energy audit as part of the financing process. The Help My House program, launched by a group of South Carolina co-operatives with U.S. Department of Agriculture Rural Economic Development Loan and Grant Program funding, also utilizes on-bill financing to fund a whole-home energy efficiency approach. Those who participated in the pilot are paying off the 10-year loans through a surcharge on their bills. However, because they’ve saved so much through whole-home efficiency, there is an average $25 savings each month, even with the loan.
Legislators and regulators also expect utilities to include energy efficiency programs for LMI households in their portfolios. A partnership with HomeServe can help proactively address energy efficiency and safety for your LMI customers with a suite of optional home repair policies that cover every energy contingency, from gas lines to exterior electric to HVAC and water heaters.
LMI households will often not address maintenance and repair issues, even if it means their whole home systems are not working efficiently, because they can’t afford to address them. For example, an annual HVAC system tune-up can ensure that systems are working at an optimal level and that small issued are addressed before they become big problems. Water heaters also require regular maintenance and lose efficiency over time, with most having only a useable lifespan of only 10 years.
HomeServe policies can address all these issues for your LMI customers and help them keep their home energy systems in the best shape possible. For more information about how we can help your customers improve their energy efficiency, contact us.
Heat pumps are misunderstood by many homeowners – many still believe that they do not adequately heat homes or know very little about them.
Heat pumps are more energy efficient, because they move warm air from one space to another instead of generating cold or hot air. They can save members hundreds of dollars annually in HVAC and maintenance costs, while significantly reducing their carbon footprint. However, many members are uncertain how heat pumps work and what benefits they can see from them.
Additionally, certain heat pumps – specifically ENERGY STAR-certified ones – can earn members federal tax credits. Several states, local municipalities and utilities have additional initiatives to tempt homeowners to invest, but many members aren’t aware of these benefits.
We turned to Don Johnson of Freedom Heating and Cooling in Birmingham, Alabama, to get a frontline view on how homeowners view heat pumps, from someone who is out in the field every day. Don is the president at Freedom, which has been serving northern Alabama since 2003, when Don’s father, John Johnson, first began operations. Don and Freedom joined the HomeServe team in 2020.
Don participated in a quick question-and-answer session to give a snapshot of how homeowners view heat pumps right now.
Q: If a customer is interested in energy efficiency or saving money, have they expressed interest in heat pumps?
A: Not usually.
Q: If you’ve suggested an upgrade/installation, have you encountered any misperceptions/confusion from customers? What were they?
A: Most misunderstandings are that it will not heat the house as well as a furnace. Older heat pumps were often thought to not be working because the air out of the vent was not as hot as a furnace. However, 95-degree air will warm a home, but will also “feel” cool as it blows over you.
Q: What are the most common concerns from customers about the installation of a heat pump?
A: Is it “right” for my home.
Q: Are customers generally well-informed?
Q: Do customers understand what it is? If they don’t know, do you explain it to them or sell them something else?
A: We have to educate the benefits of lower gas bills with heat pumps, especially with dual fuel systems, which combine both gas heating and a heat pump.
Q: What are the top reasons customers list to have one installed?
A: Comfort, and humidity control is better than a furnace.
Q: What are the biggest obstacles to customers having heat pumps installed?
A: Electrical panel size and wiring are the biggest concerns. Proper size ductwork is more critical for a heat pump than a furnace or air conditioner.
Q: When you recommend heat pumps to customers, what benefits do you highlight?
A: Energy savings, comfort and better humidity through the winter.
Q: Are you seeing an increase in interest?
A: Heat pumps are more acceptable today than in the past.
Q: Any questions coming up frequently about heat pumps?
A: Will it heat my home as well as a furnace.
Q: How often do customers come to you with questions about heat pumps?
A: No; not often. We tend to bring up the subject.
Q: What makes the ideal customer or job?
A: Younger families with comfort concerns. Older individuals grew up with the blast of “hot” air and want that.
Educating members about the benefits of a heat pump is an uphill battle, but partnering with HomeServe can help you take it on – we have a nationwide network of pre-vetted contractors who know HVAC and can help members work out whether a heat pump is the smart move for their home.
HomeServe partners with utilities throughout North America to help educate their members, shield them from the unexpected expense of emergency home repairs and make finding a reputable contractor easier. We have an optional warranty plan for all of your members’ most vital whole-home systems, including HVAC, interior electric, interior plumbing and electrical and gas connections.
For more information on how we can help bring your customers peace of mind, contact us.
In this is time of unusual challenges and opportunities for utilities, a recent roundtable hosted by HomeServe explored a number of issues facing the industry today. “How are Utilities, Regulators and Customers Planning for a Changing Environment?” featured a panel of industry veterans and thought leaders: Bill Flynn, Leader Energy Industry Team, Harris Beach Attorneys at Law; Ed Thomas, Executive Director, UtilityExchange.org; and Kenneth Black, former owner and chairman at E Source.
Among the issues discussed were potential effects of revenue shortfalls on energy efficiency program development and other important utility initiatives, new utility customer engagement strategies and the evolving role of regulators.
“Opportunities are limitless for utilities right now,” said Ed Thomas. “The relationship between the utility and the customer is really evolving. There’s a real opportunity here to strengthen that.”
One of the ways to do that is to look holistically at the interplay between customers, especially low- and moderate-income households, and demand side management goals.
“Why not try and combine these two issues?” Kenneth Black said. “‘I need to focus on my demand side management goals and need to focus on my customers who are at-risk.’ And tie participation in your energy efficiency and demand response programs with some forgiveness of arrearages.”
In addition to the old standby of reliability, customers are looking at things like resiliency against climate change for the grid and their homes, enhancing safety, energy efficiency and electric vehicles, all areas in which utilities are positioned as experts.
“It’s important to note: all roads lead to the customer,” Black said. “The future utility needs to hold on to and grow their long-established customer relationships and trust they have with their customers.”
Utilities also can leverage the growing interest in distributed energy resources, electric vehicles and energy efficiency to partner with their local communities and demonstrate their commitment by investing in economic development, possibly by targeting small businesses as vendors and partners.
For many years, consumers and regulators expected utilities to simply maintain their wires and pipes and manage supply to meet demand. However, in recent years, utilities are expected to move into energy-adjacent spaces and enhance the customer experience through value-added services.
Customers are looking for new benefits, such as reducing their reliance on gasoline with electric vehicles, improving their indoor air quality or increasing their home’s resilience with battery storage systems and generators. Although flexible load programs have traditionally focused on managing devices such as water heaters and air conditioning compressors, grid-interactive devices make it easier to run them whenever the cost is lowest, the energy is greenest or the time is most convenient to avoid scheduled power outages. If utilities aren’t leveraging their expertise in these spaces, disrupters will step in.
According to Bill Flynn, technology has not only changed the industry, but it has changed the way it is regulated as well. “There is more opportunity for stakeholders outside of the utility world to get involved in the process of regulation,” Flynn said. “There’s a lot more information that utilities and regulators are taking in. We’re no longer under the radar.”
Regulators also are having more frequent dialogue and looking for engagement, so utilities need to be proactive, and let regulators and other community stakeholders know they are good corporate citizens.
“You should never take anything for granted – that regulators should just know that these (initiatives) are taking place out in the community,” Flynn said. “They don’t.”
Watch the entire roundtable discussion below. For more information about HomeServe, contact us.
Utilities put significant investment in energy efficiency programs, but only 40 percent of consumers participate in energy efficiency opportunities that would reduce their bill, even if they are struggling to pay their bills. Despite the sensibility of participating in an EE program, they often don’t resonate with consumers.
There’s a lot of noise for utilities to cut through to get consumers’ attention, and most utilities are not top-of-mind to begin with. Consumers may believe the obstacles to energy efficiency are too many or too difficult to overcome.
What if you could use behavioral science to decipher how and why consumers are making energy decisions? Levering human nature to encourage consumers to participate in EE programs can be more effective and less expensive than incentives or rebates.
With the data you already have on hand and simple tools, you can save terawatts and improve engagement by using proven behavioral science methods to inspire consumers to participate in energy efficiency programs.
“Saving Energy by Working with Human Nature” will give you the tips and real-world examples you need.
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