Behavioral energy efficiency: how you live affects how your home performs

Remember when Mom used to tell you to shut off the light when you left a room? Or when Dad told you to put on a sweater if you’re cold? It turns out they were ahead of their time! More and more home energy professionals recommend behavioral energy efficiency as an effective way to lower your home energy costs. Just like Mom and Dad. But what exactly are behavioral adjustments, and which ones are the most effective?

Pisgah Home, Highland Park Historic District

A “nudge” toward behavioral energy efficiency

In the past few years, we’ve heard a lot about behavioral “nudges.” These nudges are small changes in the way we work and live that have the power to help us make better decisions and improve our results. One of the most common examples is about saving money for retirement. It was presented in the book Nudge, by Richard H. Thaler and Cass R. Sunstein. The argument is that

many Americans are not saving enough for retirement… ‘in 2005 the personal savings rate for Americans was negative for the first time since 1932 and 1933 – the Great Depression years.’

To improve the savings rate, Thaler and Sunstein argue, we need to make a small change to the way retirement savings plans like 401(k)s and 403(b)s work. Their solution? Make retirement savings plans opt-out instead of opt-in. “Nudge” folks to save money by making the savings effortless and easy to manage, and we should all begin to save more for retirement. No more worrying about balancing our portfolios, asset allocations, rates of return, or any of the details that can overwhelm us and stop us from taking action.

Behavioral energy efficiency nudges work in the same way.

If you want to save money on your home energy expenses, the first thing you need to know is where, exactly, is your money going? The average American family spends more than $2,500 each year on home energy. But that doesn’t all go to the light bulbs burning in empty rooms, or the teenager standing in front of an open refrigerator.

Know yourself, know your home energy costs

A house sitting on a stack of money
Go green and save some green!

Home heating and cooling, along with domestic hot water (DHW), account for the lion’s share of your home energy bills. That means that controlling home energy costs begins with understanding those costs. Our Heating Energy Assessment Tool uses home performance data from your utility bill to show you your exact heating, cooling, and DHW costs down to the penny. Now that you know these costs, you can nudge yourself and your family in the right direction.

Maybe a programmable thermostat is right for you, or you’d like to try replacing your 3 most frequently used incandescent light bulbs with CFL or LED bulbs. Your utility company or state government might have weatherization incentives available, so that you can take advantage of professional air sealing and weather stripping work. A RESNET or BPI certified home performance contractor can work with you to complete a whole house energy audit and plan home improvement projects to maximize your savings and your comfort.

Because how you live affects how you use energy, it can be easy to start saving money today. There are tools, professionals, and incentive and rebate programs available to help you. And at the very least, we can remember Mom, and turn off the lights in an empty room.

How will the Green Button Initiative work for you?

What is the Green Button Initiative?

Launched in January 2012, the Green Button Initiative provides utility customers with their home energy usage data, directly from the utility’s website. Just click the green button icon and go.

With this information at their fingertips, consumers would be enabled to make more informed decisions about their energy use and, when coupled with opportunities to take action, empowered to actively manage their energy use. – U.S. Chief Technology Officer Aneesh Chopra

Green Button Dowonload My Data
Look for this button on your utility’s website!

How will the Green Button Initiative work for you?

Having your home energy usage data is good. What you can do with it is even better. Data from your utility company about your own energy usage can help you reduce high energy costs. You can see exactly what you’re spending on heating, cooling, and hot water. Understanding your home energy costs is the first step toward using home energy efficiency to reduce those costs. It may be as simple as changing the way you use your home, or you may decide to hire a professional to complete a whole house energy audit.

According to the Department of Energy, which is advising utilities and businesses on data standards and program implementation, only 35 companies currently support the Green Button Initiative. More have pledged to do so, and many others will join the program in the future. If you want to know more about the technical aspects of the Green Button Initiative, check out the independent web site Green Button Data, or the US government’s Green Button web site.

Shaheen-Portman, the SAVE Act, and the All of the Above Energy Policy

Shaheen-Portman, the SAVE Act, and the All of the Above Energy Policy

Last month we reported on President Obama’s “All of the Above” energy policy following his State of the Union speech. Especially important for the home performance industry are proposed laws like Shaheen-Portman and the SAVE Act. These will help homeowners take basic steps, like performing home energy audits, and undertaking weatherization, air sealing, and HVAC retrofit and upgrade work, that can be part of everyone’s personal energy policy.

Secretary of Energy Dr. Ernest Moniz wrote a letter to explaining why and how “All-of-the-Above is Making a Difference Across America.” Dr. Moniz focused on generation in his letter, noting that California’s Ivanpah solar thermal plant will power 100,000 homes thanks to a successful public-private partnership and a loan from the Energy Department.

In Waynesboro, Georgia, a $6.5 billion loan will help start construction on advanced nuclear reactors at Plant Vogtle, powering “1.5 million homes while preventing 10 million tons of carbon pollution annually.” Projects like these will satisfy the supply side of the energy equation. But what about the demand side?

Residential energy efficiency, energy costs focus of new laws

Senators Shaheen (D-NH) and Portman (R-OH) reintroduced their Energy Savings and Industrial Competitiveness Act on Thursday. The bill focuses on enhancing energy efficiency in residential, commercial, and federal buildings. Senator Shaheen told New Hampshire Public Radio that “energy efficiency is the cheapest, fastest way to deal with our energy needs.” She’s right.

On the home front, Shaheen-Portman provides for expanding proven programs like weatherization of existing homes, and a new amendment would pay for the SAVE Act. This bill would require federal mortgage underwriters to account for a home’s projected energy costs when calculating mortgage affordability. This simple rule change would finally tell homeowners the true cost of home ownership, the PITE Payment: Principal, Interest, Taxes, and Energy. Why are energy costs so important to home ownership?

Utility bills are usually larger than either real estate taxes or homeowners insurance, but they are currently ignored in mortgage underwriting.

We agree with the Institute for Market Transformation’s assessment of the SAVE Act, and we support both Shaheen-Portman and the SAVE Act. Shaheen-Portman, the SAVE Act, and the All of the Above Energy Policy together will help grow the home energy efficiency market, and they will help us make our homes more affordable, more comfortable, and more energy efficient. And that’s an “All of the Above” home energy policy we can all agree with.

Home energy efficiency opportunity in 2014

Residential energy efficiency gained momentum throughout 2013, with technology advances in programmable and Internet-connected thermostats, affordable CFL and LED light bulbs, and a strong effort by home performance professionals to help their customers go green. In addition, many homeowners and property managers took advantage of a federal tax credit and replaced inefficient HVAC system components with Energy Star rated appliances. Although this tax credit expired on December 31st, many state governments and utilities committed to funding their residential energy efficiency rebate programs throughout 2014. And many of these programs will expand to be available to a greater number of homeowners, thanks to successful test programs in 2013. All of these developments point to a healthy and growing home energy efficiency market in 2014.

2014 means opportunity for home performance professionals

The first step for homeowners who want to go green in 2014 is to be aware of their home’s energy performance: its consumption and costs. With these numbers in hand, which can be found from a single utility bill with our Home Energy Performance Calculator, home performance professionals can recommend comprehensive strategies for homeowners: everything from the way they live in their homes to extensive retrofit and upgrade work is on the table.

Energy efficiency products and services will always be in demand from homeowners, but these aren’t the only opportunities for home performance professionals. Helping consumers understand their home’s energy performance is a key step in winning their home improvement business. Pike Research estimated that the home energy auditing market will grow to $23.4 billion this year, and it all starts with homeowner education. When a homeowner understands energy consumption and costs, a home performance professional can explain the benefits of a whole house energy audit, retrofit and upgrade work, and rebate programs to create a less expansive, more comfortable, healthier home. Who doesn’t want that?

Simple behavioral adjustments, like running the dishwasher during off peak hours, can help, along with turning off the lights in empty rooms. These changes, which can become habit in as little as two weeks, along with easy Do It Yourself projects are the low hanging fruit of home energy efficiency. Home performance professionals are in the best position to educate homeowners and guide their quest for energy efficiency. The Wall Street Journal reported “after they pick all the low-hanging fruit and see the results, people start seriously considering more significant engagement.” That means a whole house energy audit and professional retrofit and upgrade work.

As the benefits of residential energy efficiency gain traction with homeowners the prices of DIY upgrades like light bulbs, programmable and learning thermostats, and weatherization kits are likely to fall. Professional retrofit and upgrade installations and service, such as HVAC systems, insulation, and windows and doors, are the logical next step for the engaged homeowner. This is an organic and sustainable market for home performance contractors.

The “perfect storm” of increased homeowner awareness, high efficiency products at affordable prices – with and without rebate programs, and a strengthening real estate market, is an excellent opportunity for our industry. Pike Research also estimated the energy efficiency home improvement market will exceed $50 billion. We expect homeowner demand for all energy efficiency products and services to strongly grow throughout 2014.

2014 year will bring a lot of opportunity to the home performance industry as homeowners learn more about residential energy efficiency and its benefits, including a more comfortable, less expensive, healthier home. Home performance professionals are in a great position to reconnect with past customers and win new business thanks to strong demand from homeowners who want to go green in 2014.