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Why
is Energy Efficiency by Homeowners so Important?
Residential Structures consume over 25% of the energy used in
the United States. In fact, according to a 2007 report from McKinsey Global
Institute, THE US RESIDENTIAL SECTOR IS THE SINGLE LARGEST ENERGY CONSUMER
IN THE WORLD, over 20 Trillion BTUs annually. But there’s more. The
typical Long Island home annually releases over twice the carbon dioxide of the
average car. As an aggregate, buildings in the United States are actually
responsible for almost 50% of the nation’s greenhouse gas emissions.
In thinking about the environmental and economic impact
of energy use in Long Island homes it is important to look at the history of the
growth of our communities. During the period from the end of World War II to the
mid 1970's the United States saw an unprecedented growth surge in the build out
of inexpensive single family structures. Some regions including Long Island were
especially affected by the post war suburbanization boom. Beginning in 1930 and
ending in the 1970's, the Long Island population exploded. In 1930, the total
Long Island regional population was around 450,000 people. By 1950, that
population doubled to almost one million and then doubled again by 1960 to two
million people. That kind of growth at that time in our nation's history was
unprecedented. While other areas of this country were seeing post-war growth,
they were not seeing growth as rapid as Nassau and Suffolk's.
One could say that Long Island epitomizes the
phenomenon of how suburbia grew. Between 1940 and 1970 more than 500,000
individual detached homes were built on Long Island. An additional 100,000
single family structures were built from 1970 to 1980. During this time the
bulk of the houses were built in both counties in mass produced subdivisions.
To say that these homes were built cheaply is an
understatement. For example in 1958 a 1200 square foot one story ranch
in Plainview sold for a price of $11,000. Adjusted for inflation this translates to
a home built for about $ 60 per square foot today, less than a third of the
current per square foot cost to build. It is reasonable to assume that mass
produced subdivisions would have seen some economies of scales versus the singly
built structures typically constructed now. But this is still a huge disparity
and points to substandard construction, homes that are under insulated, have
infiltration air leaks and are real “energy guzzlers”.
Target – Scale
"What can you do?” This phrase of four words has
become the latest mantra for the green movement. In reality though what can you
do? While every individual’s positive actions certainly make a difference it is
only when a community acts en masse that meaningful change can occur. The
challenges that our society faces due to the inefficient use of resources and
the pollution caused by burning fossil fuels are incredibly large, planetary in
scope. While perhaps personally economically helpful and satisfying the
reality is that actions taken by individuals are just too small to be
meaningful. Only large, community wide efforts can produce the scale necessary
to produce significant results.
Motivators for Energy Efficiency by Homeowners
The whys for reducing the use of energy in Long Island homes are quite
compelling.
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Economic Wellbeing -
The average home on Long
Island spends over $ 4000 per year on fuel oil, natural gas, propane and
electricity for heating, water heating, air conditioning, appliances, lighting
and lifestyle. Conservative estimates are that each of these homes can reduce
their use of energy by 25% or more by enacting cost effective energy efficiency
technology retrofits. This is money that homeowners can use to meet their
everyday needs, pay down debt or save. It stays in the Long Island economy
rather than being exported elsewhere.
§
Political Stability -
Congressman Steve Israel
has eloquently made the argument that our country’s reliance on imported fossil
fuels represents a strategic threat to the United State, one with huge
implications. They can only be decreased by a significant reduction in the
import of fossil fuels.
§
Environmental
- There is
overwhelming scientific evidence that the impact of the burning of fossil fuels
is a significant contributor to global warming. Rapid large scale actions
across communities are necessary to meet carbon reduction targets.
What Makes Sense – Home Energy Efficiency Improvements That
All Long Island Homeowners Need To Implement
§
Thermal Envelope -
Homes need to be tested using
blower door and infrared thermography to determine the “level of leakiness” in
the structure. Based upon these findings infiltration losses should be sealed
with caulk, 2 part foams, dense packed cellulose and other methods
§
Insulation -
All homes should
increase attic insulation to R-39 or better. Walls and foundations should be
evaluated for the cost effectiveness of adding insulation.
§
Heating and
Cooling Plant -
Boilers, furnaces, hot water heaters and central air conditioning systems need
to be made more efficient by the installation of inexpensive high efficiency
burners, programmable thermostats and intelligent controllers. Ducts and pipes
also need to be insulated and sealed for leaks.
§
Lighting -
The advantages of
replacing incandescent bulbs with compact fluorescents are well documented. The
challenge however is acceptance of these lamps by homeowners because of lighting
quality, color and warming time lags. In those cases strong results can still
be achieved by adding occupancy sensors, timers and dimmers into rooms where
conversion to CFs does not work for design reasons.
§
Appliances -
When feasible
kitchen appliances, washers and dryers and other equipment should be replaced
with high efficiency energy star rated models.
§
Behavior-
The way that we
consume energy can be adjusted to achieve strong savings in fuel and electricity
use without meaningful lifestyle changes. LI Green has been installing Power
Monitor devices for this purpose which when used properly are achieving
reductions in electricity use of ten percent or more in the average Long Island
Home.
Economic Model of Home Energy Efficiency
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Home Improvements Undertaken |
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Insulation of Attic |
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$900.00 |
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Air Sealing |
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$1,100.00 |
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Caulking and Weatherstripping |
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$400.00 |
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Intelligent Controllers for Boiler and Central AC |
$900.00 |
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Replacement of one major appliance |
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$950.00 |
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Lighting replacements and control upgrades |
$300.00 |
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Electricity Monitoring Equipment |
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$175.00 |
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Energy Efficiency Consultation Services |
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$250.00 |
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Retrofit Total $4,975.00 |
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Assumptions |
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1- For Model we will apply a 10% safety factor and work with a home improvement amount of $5500 |
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2- Annual energy savings of $ 1000 after retrofits in year one |
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3- Energy prices rising 8% per year |
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4- Direct Payment Comparison versus 5% per annum interest compounded |
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5- Financing comparison using 7years at 5.9% interest. Monthly payment is $ 80 |
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Comparison of Energy Investment versus compounded interest |
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Energy Savings |
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Year 1 |
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$1,000.00 |
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Year 2 |
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$1,080.00 |
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Year 3 |
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$1,166.40 |
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Year 4 |
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$1,259.71 |
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Year 5 |
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$1,360.49 |
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Year 6 |
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$1,469.33 |
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Year 7 |
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$1,586.87 |
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Energy Savings Total |
$8,922.80 |
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Compounded Value |
$8,195.12 |
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Energy Advantage |
$727.68 |
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Energy Savings |
Debt Service |
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Net Savings |
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Year 1 |
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$1,000.00 |
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$960.00 |
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$40.00 |
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Year 2 |
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$1,080.00 |
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$960.00 |
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$120.00 |
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Year 3 |
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$1,166.40 |
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$960.00 |
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$206.40 |
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Year 4 |
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$1,259.71 |
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$960.00 |
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$299.71 |
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Year 5 |
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$1,360.49 |
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$960.00 |
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$400.49 |
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Year 6 |
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$1,469.33 |
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$960.00 |
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$509.33 |
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Year 7 |
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$1,586.87 |
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$960.00 |
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$626.87 |
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Net Income |
$2,202.80 |
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Energy Savings |
Debt Service |
Net Savings |
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Year 1 |
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$1,000.00 |
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$960.00 |
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$40.00 |
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Year 2 |
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$1,080.00 |
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$960.00 |
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$120.00 |
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Year 3 |
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$1,166.40 |
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$960.00 |
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$206.40 |
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Year 4 |
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$1,259.71 |
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$960.00 |
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$299.71 |
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Year 5 |
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$1,360.49 |
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$960.00 |
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$400.49 |
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Year 6 |
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$1,469.33 |
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$960.00 |
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$509.33 |
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Year 7 |
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$1,586.87 |
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$960.00 |
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$626.87 |
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Year 8 |
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$1,713.82 |
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$0.00 |
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$1,713.82 |
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Year 9 |
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$1,850.93 |
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$0.00 |
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$1,850.93 |
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Year 10 |
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$1,999.00 |
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$0.00 |
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$1,999.00 |
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Net Income |
$7,766.56 |
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These models are very compelling yet the uptake of these types of home improvements is less than 0.5% of the available housing stock per annum. The following section looks at the reasons for this.
Resistance Points for Implementation of Energy Efficiency by Homeowners and Recommended Solutions
Trust -
Though well documented studies show otherwise, many Long Island homeowners are
highly skeptical that investing in energy efficiency will achieve expected
goals.
Cogent community outreach and educational programs need to show homeowners
the tremendous opportunities that they are missing by not retrofitting their
homes.
§
Availability
of Capital -
Energy efficiency
home improvements, while reasonably priced, still compete for a homeowner’s
personal capital versus other expenditures. Energy fees, though expensive, are
recurring expenditures that are spread throughout the year rather than
singularly.
Flexible financing programs are needed that allow homeowners to afford energy
efficiency retrofits that are completely paid for out of the energy savings that
they will achieve. Working with the Bethpage Federal Credit Union LI Green
has created this funding program.
§
Do It Yourself
Mentality -
The idea that
homeowners can energy retrofit their own homes has been promulgated for many
years. The reality is that the big wins in energy efficiency only come from the
use of diagnostic technologies and construction techniques that are beyond most
homeowner’s capabilities. Experts are needed to be highly effective.
A huge increase in the number of experts in home energy analysis and rating
is urgently needed to meet this need. Arguably every home on Long Island
should be audited to determine the true level of need in our community.
Working with Stony Brook University, the US Green Building Council and others
the LI Green Workforce Training Program will ensure an adequate supply of highly
skilled technicians to meet this need.
Rebate and Tax
Credit Expectation -
Homeowners have been
conditioned to expect utility and government subsidies for energy efficiency
improvements. While some green energy programs, such as Solar Photovoltaics
survive only because of very large subsidies (over 60% between utility and
government programs), the rebates for energy efficiency are much more modest to
the point of almost being meaningless. For example in the model above the
difference in the loan financing charge with LIPA’s rebates is less than $ 8.00
per month, an almost negligible amount when one considers the upside savings.
And enrollment in these incentive programs adds a very high degree of
bureaucracy (and significant administrative costs), dramatically complicating
the process and reducing market acceptance.
While appreciated by the individual homeowner receiving them, utility rebates
for energy efficiency de-incentivize the marketplace. The dollars spent on
these programs might be better spent in other ways that will generate greater
results. As the above economic models identify Energy Efficiency in Long
Island Homes works, whether or not subsidized.
§ Utility Energy Efficiency Programs - On February 22, 2008 Kevin Law, the CEO of LIPA stated at a meeting of Long Island MidSuffolk Business Action that “Conservation is counter-intuitive to a utility company.” Yet the Long Island Power Authority is the primary public agency that promotes energy efficiency programs in our communities with public funds and spends hundreds of millions of dollars of our money on efficiency programs with very varied results Because of their administrative structure with National Grid as implementation partner, the overhead costs to manage these programs are very high.
LIPA’s role in community energy programs needs to be changed to one of a stakeholder rather than gatekeeper. Consideration should be made for changing National Grid’s implementation partner status and replacing or augmenting it with Long Island based community development organizations.
§ Personal Inertia - Doing nothing is easier to do than making changes. While most people would like to reduce the use of energy at their home to date this has been a difficult to implement task. So most of us have done very little.
Community based home energy efficiency methodologies need to be organized that will simplify the process for homeowners to participate, reduce costs due to economies of scale and provide clear motivators for action.