Roughly $230 billion dollars each year — that’s what Americans pay utility companies to provide their homes with electricity and natural gas. Lower-income residents are often hit the hardest, spending between 17 percent and more than 50 percent of their incomes on energy, significantly more than other households’ average of just 4 percent.
Take Audrey Spann, for example. Spann still lives in the same 100-year-old row house in Philadelphia in which she was raised. Due to its age, her home lacked the modern upgrades necessary to keep the winter chill at bay. Before Spann applied for significant, essential upgrades through Habitat for Humanity of Greater Philadelphia, she was boiling water in her kitchen and carrying it upstairs for her bath. With support from a grant from the Department of Energy, Habitat partnered with Spann to make numerous energy-conserving improvements to her home, leading to lower water, electric and gas bills.
Spann is just one of many homeowners to benefit from weatherization and efficiency programs, yet millions more Americans face residential energy costs that are excessive compared to their overall incomes. Struggling to meet high monthly expenses, these households cannot afford to invest in the energy efficiency measures to alleviate them.
As outlined in our 2015 Shelter Report, “Less is More: Transforming Low-Income Communities through Energy Efficiency,” residential energy efficiency offers untold potential for savings, job creation, improvements in health and safety, and community reinvestment. Increasing energy efficiency means increasing opportunity for the economy as a whole, as well as for lower-income Americans.
With global energy consumption expected to rise significantly over the next three decades, the time for action is now. Implementing or enhancing programs that improve access to “on-bill financing,” which allows utility customers to upgrade their homes and amortize the cost over time by adding additional charges to their utility bill, can help give access to cost-saving innovations to lower-income families in the very near-term.
Extensive research has identified effective approaches to residential energy efficiency and cost-effective policies that increase access to home improvements for those who need them most. For example, Congress is currently considering a number of proposals to set the U.S. on the right path toward an energy efficient future. One such proposal is the SAVE Act for energy-efficient mortgages, which will provide buyers credit for energy-efficient features when they apply for a mortgage and thus help them qualify for a larger mortgage in order to cover required energy-efficient improvements, which will be included in all home appraisals for purchase or refinancing.
No family should have to choose between putting food on the table and heating their home. Fortunately, there is a roadmap for addressing residential energy efficiency and building a better, more prosperous nation to boot. Policymakers who take the opportunity to address this critical issue through prudent energy legislation will be part of creating a brighter future for generations to come.