U.S. households typically use up to 30 percent more energy than necessary to achieve the desired level of performance and comfort.6 This waste costs consumers money, stresses our energy supply systems, and unnecessarily creates air pollution from fossil fuels used to produce electricity. The impacts are local, national, and global, and the U.S. Government has increasingly recognized the need to improve the efficiency of existing housing in the United States.
The largest portion of household energy consumption over 40 percent goes toward warming the inside environment in the winter and cooling it in the summer.7 Homeowners can dramatically reduce this seasonal energy consumption by installing new heating and cooling equipment; sealing and insulating heating, ventilating, and air conditioning (HVAC) duct work; and improving the building envelope with air sealing, insulation, and upgraded windows. These efficiency measures are proven, cost-effective, and provide numerous benefits for homeowners, including increased comfort and improved durability. Yet many homeowners have not embraced these measures and significant energy-savings potential remains to be captured.
Nearly 100 utilities, states, and regional organizations referred to here as energy efficiency program sponsors offer programs to spur consumer investment in heating and cooling related energy efficiency improvements. Their home improvement programs range from simple to complex, and can include such elements as consumer education and outreach, technical assessments, contractor training, post-installation inspections, and financial incentives (often special energy-efficiency financing). Many homeowners have access to cash or market based financing and really do not need financial assistance from program sponsors to afford the efficiency upgrades. However, program sponsors have found that offering financing enhances the success of their programs by providing a marketing hook for consumers, serving as a platform for building a qualified contractor network, and providing a mechanism for gathering program evaluation data.
The purpose of this report is to help program sponsors understand how homeowners typically pay for home improvements, and the role special program financing can play in improving energy-efficiency programs. It provides background information on U.S. home improvement spending, identifies key sources of funds used to pay for improvements, outlines best practices in energy-efficiency home improvement program design, describes options for setting up a financing program, and provides summaries of six successful efficiency programs that have used financing in slightly different ways. Appendix A includes a more detailed overview of the various market-based loan products available to homeowners for financing home improvements.
CONTENTS
Executive Summary
Introduction
Home Improvement Spending in the United States
- A. National Trends
B. Homeowner Investments in Energy Efficiency
C. Paying for Home Improvements
Energy-Efficiency Home Improvement Programs
- A. Common Elements of Successful Programs
- 1. Comprehensive Home Assessments
2. Contractor Networks
3. Consumer Financing and Incentives
4. Marketing and Outreach
5.Post Installation Inspections and Quality Assurance
B. Setting Up a Financing Option
Energy Efficiency Program Summaries
- A. MassSAVE HEAT Loan Program
B. Wisconsin Energy Conservation Corporation
C. New York State Energy Research and Development Authority
D. Austin Energy
E. Pennsylvania’s Keystone Home Energy Loan Progam*
F. Southern California Gas Company and San Diego Gas & Electric*
Conclusions and Recommendations
Appendix A - Home Improvement Loan and Mortgage Products
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PDF Ebook Financing Guidebook for Energy Efficiency Program Sponsors
