Residential Energy Retrofits: An Untapped Resource Right At Home

As convention time rolls around and the presidential election heats up, candidates will be more and more pressed for the specifics of their climate change policies. One of the most important ways of addressing climate change that should be a part of any approach is reducing energy use in residential homes. They account for over 20 percent of CO2 emissions and total energy use in the US, and a program for large-scale improvement would offer a solution that actually saves money compared to the required investment.

Current and proposed climate change policies focus primarily on setting minimum standards for new homes through building codes. The scope of energy use under consideration by cap-and-trade or carbon taxation schemes complicates inclusion of residential buildings: the emissions from one residence cannot serve as a commodity in the same market as electricity generating facilities. FAS has analyzed the possibilities for reconciling this difference, and has determined that retrofitting operations supported by utilities and included in emissions reduction mechanisms are a critical solution to the problems of energy consumption, cost, and emissions.

A system of residential energy efficiency improvements would enable cost-effective improvements financed by homeowners and utilities. Utilities would provide energy auditing services to establish the level of retrofit measures appropriate for homeowner and utility investment. Utilities are ideally situated to play a large role in retrofitting by providing low-cost energy auditing tools, up-to-date energy cost  summaries, performance data on retrofit options, and bulk purchase rates for improvements. In addition, utilities have a vested interest in retrofitting residences for energy efficiency because these improvements help utilities cope with rising demand and diminish the need for new plant construction. In order to improve residential energy efficiency and implement this policy, policymakers should consider the following recommendations as part of an overall approach to climate change mitigation:

  • Climate change policy must include provisions to account for the environmental costs of inefficiency in existing residential buildings.
  • National policymakers should help state public utility commissions decouple sales volume from profits, in turn providing uniform national promotion of energy efficiency.
  • National policymakers should facilitate the implementation of a system of cooperative investment by homeowners and utilities in household retrofits to improve residential energy efficiency.

Read the full analysis here.

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