Home Energy Efficiency Project

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.

§        
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

Home Improvements Undertaken

 

Insulation of Attic

 

 

 

$900.00

 

Air Sealing

 

 

 

$1,100.00

 

Caulking and Weatherstripping

 

 

$400.00

 

Intelligent Controllers for Boiler and Central AC

$900.00

 

Replacement of one major appliance

 

$950.00

 

Lighting replacements and control upgrades

$300.00

 

Electricity Monitoring Equipment

 

$175.00

 

Energy Efficiency Consultation Services

 

$250.00

 

 

 

 

 

Retrofit Total    $4,975.00

 

Assumptions

1- For Model we will apply a 10% safety factor and work with a home improvement  amount of $5500

2- Annual energy savings of $ 1000 after retrofits in year one

3- Energy prices rising 8% per year

4- Direct Payment Comparison versus 5% per annum interest compounded

5- Financing comparison using 7years at 5.9% interest.  Monthly payment is $ 80

 

Comparison of Energy Investment versus compounded interest

 

 

Energy Savings

 

 

 

Year 1

 

$1,000.00

 

 

 

 

Year 2

 

$1,080.00

 

 

 

 

Year 3

 

$1,166.40

 

 

 

 

Year 4

 

$1,259.71

 

 

 

 

Year 5

 

$1,360.49

 

 

 

 

Year 6

 

$1,469.33

 

 

 

 

Year 7

 

$1,586.87

 

 

 

 

 

 

 

 

 

 

 

Energy Savings Total

$8,922.80

 

 

 

 

Compounded Value

$8,195.12

 

 

 

 

Energy Advantage

$727.68

 

 

 

 

                         

 

Energy Savings

Debt Service

 

Net Savings

Year 1

 

$1,000.00

 

$960.00

 

$40.00

Year 2

 

$1,080.00

 

$960.00

 

$120.00

Year 3

 

$1,166.40

 

$960.00

 

$206.40

Year 4

 

$1,259.71

 

$960.00

 

$299.71

Year 5

 

$1,360.49

 

$960.00

 

$400.49

Year 6

 

$1,469.33

 

$960.00

 

$509.33

Year 7

 

$1,586.87

 

$960.00

 

$626.87

 

 

 

 

 

 

 

 

 

 

 

Net Income

$2,202.80

                     

 

 

Energy Savings

Debt Service

Net Savings

Year 1

 

$1,000.00

 

$960.00

 

$40.00

Year 2

 

$1,080.00

 

$960.00

 

$120.00

Year 3

 

$1,166.40

 

$960.00

 

$206.40

Year 4

 

$1,259.71

 

$960.00

 

$299.71

Year 5

 

$1,360.49

 

$960.00

 

$400.49

Year 6

 

$1,469.33

 

$960.00

 

$509.33

Year 7

 

$1,586.87

 

$960.00

 

$626.87

Year 8

 

$1,713.82

 

$0.00

 

$1,713.82

Year 9

 

$1,850.93

 

$0.00

 

$1,850.93

Year 10

 

$1,999.00

 

$0.00

 

$1,999.00

 

 

 

 

 

 

 

 

 

 

 

Net Income

$7,766.56

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.

 

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