Lower-income consumers forced to tolerate higher energy bills

It shouldn’t come as a surprise that the people who would benefit the most from energy-bill-reducing home efficiency improvements are often those least able to afford such renovations.

Unfortunately, that forces many lower-income people in the US to tolerate monthly energy costs that are much higher than they could, or should, be.

People earning less than $25,000 a year say they would have to see their monthly energy bills go up by $120 or more before they could justify spending money on energy-efficient home improvements, according to the Shelton Group’s seventh annual Energy Pulse survey. By contrast, those in higher-income brackets ($100,000 and up) have a lower threshold — $113 — for rising energy costs.

Education levels also factor into the willingness to pay for efficiency measures, the survey found. People with a high school degree or less say they would consider making improvements if their monthly energy bills rose by $122 or more, compared to the $98 limit identified by those with graduate degrees.

Making matters worse, lower-income people are also more likely to live in inefficient homes. Of those surveyed making less than $25,000, 32 percent said their homes were inefficient. That’s more than twice the number of higher-income respondents ($100,000 or more) who said so: 15 percent.

The Energy Pulse survey indicates that four appears to be the “magic number” for home efficiency improvements.  Respondents who said their utility bills had dropped had completed an average of four home improvements, such as adding insulation or installing a high-efficiency water heater. Those who said their bills had increased by 10 to 30 percent reported making an average of 2.3 improvements.

The survey of 1,502 energy customers in the US found that only 42 percent have installed high-efficiency windows; 39 percent have installed extra insulation; 37 percent have installed a higher-efficiency heating or cooling system; and 24 percent have installed a higher efficiency water heater. Only 15 percent said they had gotten a home energy audit.

“Home energy audits continue to be the colonoscopy of energy efficiency,” said Suzanne Shelton, president of Shelton Group. “Everyone should get one, but too few actually go through with it.”

For many, the primary motivator for making efficiency improvements continues to be “to reduce my utility bill” (28 percent). The second-most popular answer — “because I was updating or renovating anyway” — saw a market decline from last year: from 21 percent to 9 percent.

“The top energy-saving driver for the vast majority of Americans continues to be about dollars and cents,” Shelton said. “It’s a green decision to save energy — but for consumers, it’s the green in their wallets that matters most.”

The survey results suggest that utilities and other agencies seeking to boost home energy efficiency need to focus their efforts more on the right target audience.

“There’s a big difference between those who really need to make big efficiency improvements but can’t, the ones who wholeheartedly embrace them but probably already have them in place, and the ones who both need and can make them with a little encouragement,” Shelton said.