Many of us have been shocked by a particularly high utility bill following a bitterly cold month or a series of brutally hot days. Imagine, however, that your energy costs consistently totaled as much as half of your total monthly income.
That is a reality for many low-income Americans, who face a disproportionate energy burden and spend 17 to 50 percent of their paycheck on utility costs. Too many people are forced to choose between paying to heat and cool their homes or paying for medicine, food and other necessities.
Many low-income families and older Americans living on fixed incomes cannot afford to live in newer, more energy-efficient homes. Instead, they often live in older homes that lack adequate insulation and have outdated appliances and heating and cooling systems that are expensive to operate. Those who rent often live in units where owners have made few investments in energy improvements since the tenant bears the responsibility for utility costs.
Health issues are also at stake. Many families who struggle to pay their energy bills also contend with health issues associated with asthma, allergies and other chronic problems that can be exacerbated by exposure to unhealthy environments.
For those weighed down by energy waste and the costs associated with it, strategies such as placing a sheet in front of the door as a barrier against the cold are not effective. More viable remedies require financing options—such as the passage of social impact bonds to finance services for improving energy efficiency in distressed communities.
Another important option would be to provide homebuyers credit for energy-efficient features when they apply for a mortgage and thus help them qualify for a larger loan that would cover required energy-efficient improvements.
For those who have already purchased a home, the upfront costs for retrofits or other energy efficient improvements are often prohibitive. However, utilities that make loans directly to a property owner for improvements and collect payments as part of monthly bills can provide a cost-effective way for homeowners to realize significant energy savings.
The expansion of public-private partnerships is key to enhancing residential energy efficiency. The Energy Smart program in New Orleans, for example, brought together a broad range of public- and private-sector partners that made it easier for residents in distressed neighborhoods to navigate processes for obtaining residential audits, accessing home retrofits and identifying financing options.
We’ve successfully demonstrated that healthy, energy-efficient homes aren’t only for the wealthy, and have partnered with thousands of families whose total cost of ownership is less—even if they pay a slightly higher mortgage—because the ongoing cost of utility bills is significantly lower.
The benefits of policies and programs that improve access to energy efficiency extend to the entire community. Residential energy efficiency offers untold potential for savings, job creation, improvements in health and safety, and community reinvestment. In fact, the adoption of energy efficiency has been responsible for 60 to 75 percent of the increase in our national energy productivity since the first oil embargo in 1973. Some say it should be considered a fifth fuel—implying that energy saved is as good as energy used.
Residential energy use represents 22 percent of total energy consumption in the United States, and Americans spend $230 billion annually on home energy. That total will only increase if we as a nation do not act. Reform, innovation and bipartisan support must lead the way and put us on a path toward a more sustainable future.
Here are some recommendations for what you can do in your community. I also invite you to join us in asking lawmakers to support residential energy efficiency programs.