(Corrects spellcheck error in paragraph 8)
By Gerard Wynn
LONDON Oct 24 Taxpayer- or consumer-funded
incentive programmes to push all private homeowners in Britain
and the United States to improve energy efficiency are likely to
produce savings in energy bills that far exceed their cost,
besides cutting carbon emissions.
So far, governments have targeted efficiency programmes on
social housing and have left private homeowners to pay for their
own improvements - except for some complicated, voluntary
schemes that have had few takers.
A study by researchers at the U.S. government's Lawrence
Berkeley National Laboratory (LBNL) shows that there are easy
energy efficiency pickings to be had in the wider housing
In the United States, heating and cooling account for nearly
half of all residential energy consumption, which in turn is
responsible for nearly a quarter of the nation's energy use.
In Europe, governments are seeking ways to reduce
residential energy bills due to higher gas prices and the high
costs of subsidising renewable energy. Efficiency efforts can
achieve the same carbon goal as renewable energy at lower cost.
A renewed focus on efficiency makes sense in a world where
political qualms are being increasingly expressed about the cost
of cutting carbon emissions.
The LBNL study, published this week, found substantial
potential savings from insulating all 114 million U.S.
households by improving air-tightness to a modest level and
boosting ventilation to maintain internal air quality. ("Energy
impacts of envelope tightening and mechanical ventilation for
the U.S. residential sector")
The study estimated the potential savings from requiring all
housing to achieve the average energy saving that is now reached
under the Weatherization Assistance Program (WAP) for low-income
That would cut energy use for heating and cooling by 14
percent, which would save an estimated $11.5 billion a year, the
study estimated, or about $100 per household if applied to all
Savings would differ widely, however, depending on the local
climate, state-regulated energy prices and type of housing, the
study found. Potential savings exceed $1,000 annually for homes
in the worst condition in northern states, for example.
A more advanced standard would achieve the level of
efficiency (as regards air-tightness) now seen in the top 10
percent of the present housing stock.
That higher standard would cut consumption by 28 percent and
save about $22 billion in bills annually, the study estimated.
In such a programme, higher-income homeowners as well as poor
homeowners could make substantial energy savings.
THE QUESTION OF COSTS
It was beyond the scope of the study to compare these
savings with the cost of home improvements, which are clearly
required to calculate the net benefit.
For the WAP scheme, the U.S. government's Oak Ridge National
Laboratory (ORNL) has calculated energy savings amount to $1.80
for every $1 invested. Low-income homes tend to be in relatively
poor conditions, however, so the savings from a wider national
rollout would be less.
WAP is the largest residential energy efficiency programme
in the United States and targets households with incomes less
than double the official poverty line. It has provided services
since 1976 to more than 6.4 million households.
Typical improvements include installing insulation, sealing
ducts (for air conditioning), tuning and repairing heating and
cooling systems, reducing air infiltration and reducing electric
Average annual savings in 2010 were $436 per household,
according to ORNL.
The agency calculated total average costs per household of
$5,704 and energy savings of $10,253 (in 2008 dollars).
Britain's 1.3 billion pound ($2.1 billion) annual Energy
Company Obligation (ECO) programme provides upgrades to
low-income housing and passes on the cost to all power
It funds measures including boiler replacement, cavity wall
insulation, and attic insulation.
In January the government introduced the so-called Green
Deal as an initiative for efficiency upgrades across all of
Britain's 26 million households, but take-up has been poor so
The scheme allows households to borrow money to fund
whole-home improvements, and its aim is for the value of monthly
savings on energy bills to exceed the cost of monthly debt
Households would have to borrow at a relatively high rate of
nearly 7 percent through one major provider, the Green Deal
Finance Company. As of September, the number of deals totalled
only 2,456, government data show.
The programme has attracted few takers primarily because
homeowners must bear the costs, rather than all ratepayers.
A focus on social housing makes sense in order to upgrade
the worst buildings and reduce bills for those who spend the
biggest share of their income on energy.
But it also may make sense to roll out the same
centrally-funded approach across the entire housing stock.
More data is needed to estimate the net benefit after
including the cost of improvements. And a nationwide programme
still could target types of homes and regions that tend to
achieve the highest savings for every dollar or pound spent.
($1 = 0.6168 British pounds)
(editing by Jane Baird)