Friday, November 11, 2011

Assessing the Energy Efficiency Information Gap: Results from a Survey of Home Energy Auditors

http://www.rff.org/RFF/Documents/RFF-DP-11-42.pdf
Abstract: Commercial and residential buildings are responsible for 42 percent of all U.S. energy consumption and 41 percent of U.S. CO2 emissions. Engineering studies identify several investments in new enegy-efficiency equipment or building retrofits that would more than pay for themselves in terms of lower future energy costs, but homeowners and businesses generally do not have good information about how to take advantage of these opportunities. Energy auditors make up a growing industry of professionals who evaluate building energy use and provide this information to building owners. This paper reports the results of a survey of nearly 500 home energy auditors and contractors that Resources for the Future conducted in summer 2011. The survey asked about the characteristics of these businesses and the services they provide, the degree to which homeowners follow up on their recommendations, and the respondents’ opinions on barriers to home energy retrofits and the role for government. Findings from the survey suggest that the audit industry only partially is filling the information gap. Not enough homeowners know about or understand audits, and the follow-through on recommendations once they do have audits is incomplete. But the survey findings suggest that low energy prices and the high cost of retrofits may be more responsible for these outcomes than failures of information.
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It has been estimated that between 13 and 20 percent of the approximately $181 billion spent annually on home renovations relates in some way to energy (State and Local Energy Efficiency Action Network 2011; Joint Center for Housing Studies 2009). One study (von Schrader 2010) finds that $54 billion was spent on energy related home improvements in 2007.

One of several reasons offered for this efficiency gap, or what Jaffe and Stavins (1994) term the energy paradox, is lack of information about the cost-effective investments that can be made to improve energy efficiency....

by most accounts, only a small fraction of U.S. homes have had audits and energy retrofits. Neme et al. (2011) estimate that state- and utility-sponsored programs currently reach less than two percent of homes each year. According to the U.S. Department of Energy’s Office of Energy Efficiency and Renewable Energy, less than one percent of homes have had energy retrofits specifically to save energy (Lee 2010). Fuller et al. (2010) report on findings from a 1980–1992 Bonneville Power Administration program that provided free audits and highly subsidized retrofits. Widely considered one of the more successful residential energy-efficiency efforts, the program nonetheless only motivated 5 percent of eligible customers to have an audit. Evidence from the Residential Conservation Service, a subsidized audit program established in the late 1970s, suggests that of customers offered audits at $50 or less by their utilities, only 3–5 percent usually responded (Tonn and Berry 1986).3 Similarly, a review of 85 programs offering audits based on Electric Power Research Institute data found that the average annual participation rate was 3.2 percent (Berry 1993).
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On average, auditors reported a fee of $349, excluding any government or utility incentives and discounts.7 Reported fees varied greatly, however.... Nearly 24 percent of respondents charge less than $250, but 4.6 percent charge more than $700. ...
Among the 268 companies that provided their firm’s most recent total annual sales revenue (including revenue from products and services unrelated to energy efficiency), the median annual revenue was $237,500. The middle 50 percent of reported revenues ranged from $57,000 to $950,000. A handful of large companies include 74 (26 percent) that reported revenues of $1 million or more and 6 that reported revenue of $10 million or more.
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Responses indicate that on average, auditors believe that 57 percent of the households who could benefit from an audit do not know about the existence of audits. We also asked our survey participants to speculate about why more homeowners do not obtain audits. Lack of information figured prominently in the responses – 63 percent said that a lack of understanding about what information an audit provides is of major importance or a critical issue. But a larger percentage blamed costs – 72 percent reported that homeowners’ inability to afford the cost of upgrades was of major importance or a critical issue in explaining why people do not obtain audits.
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by Karen L. Palmer, Margaret A. Walls, Hal Gordon and Todd Gerarden
Resources For the Future (RFF) www.RFF.org
RFF Discussion Paper 11-42; October, 2011

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