Residential Decarbonization – Influencing Consumer Demand Before Inflection/Decision Making Points is Key

Allison Friedman

Rate It Green Admin
Nov 10, 2020
Residential Decarbonization – Influencing Consumer Demand Before Inflection/Decision Making Points is Key


I had given some thought to the significant, known challenge we face in decarbonizing homes to meet climate carbon reduction goals, and in particular that it’s going to be daunting to retrofit millions of existing homes, both to make sure companies are eager and available to do this work and to inspire or require homeowners to make the necessary changes for new and existing buildings.  Many in the sustainable building world have called the retrofit challenge the “elephant” in the green building “room,” as it’s maybe understandably more appealing and seemingly profitable for builders to build whole new homes than to weatherize or do smaller projects like switching out lights or installing new appliances.  Consumers might also be resistant to change or might simply not understand all of the benefits of reducing consumption and emissions.  We’ve identified the problem, but good practical solutions have proven somewhat elusive.  The good news is that Massachusetts Clean Energy Center, or MassCEC, has developed a comprehensive strategy and program to drive the needed change, based on a fundamental understanding of key home decision or inflection points.  MassCEC’s “Clean Energy Lives Here” program provides educational resources to consumers about clean energy solutions, how to make the switch, and available incentives. The great news is that this program can also act as a blueprint for similar programs everywhere. 

At BuildingEnergy20, hosted by the Northeast Sustainable Energy Association (NESEA), I was fortunate to attend a session on “Consumer Pathways to Decarbonization,” presented by Jacqueline Guyol, Peter McPhee, and Susan Mlodozeniec of Mass Clean Energy Center (MassCEC).  I was (and remain) impressed with the work MassCEC is doing on several fronts, to show by example how Massachusetts (and others) can increase clean energy adoption while lowering costs, increasing jobs, and protecting occupant health and the environment.  Through over 25 programs, MassCEC works to connect jobs seekers and employers, directly funds student internships, and funds and connects companies with funds and opportunities for technology development.  This session introduced and detailed MassCEC’s effort through the “Clean Energy Lives Here” program and information campaign to influence consumer uptake of clean energy technologies at critical residential decision points.

This session was striking to me for several reasons.  Most key is that this team understands the value of the consumer, particularly the informed consumer, in the decarbonization process.  If we do not convince consumers to make more energy efficient choices on a large scale, and within the next few years, we will put critical climate goals at risk.  In recent years, through in-person and online events, and through growing industry initiatives, it does seem that building and green building industry members have been increasingly sharing more information and collaborating.  Seemingly gone are former industry segment silos or narrow worries about sharing secret sauce, as professionals, companies, and organizations realize we can accomplish so much more and all do better, together.  However, it still seems that the consumer is most often forgotten as a valuable decision maker.  We’re talking more to each other, but we also have to look outward and share more information with those who are making many of the key decisions.  As we often say at Rate It Green, let’s get as much green building information out there as we can! 

Next, I thought the MassCEC team presented a key aspect of the residential decarbonization problem more clearly, and simply, than I had thought of it before. It seems so obvious once stated that we have to reach consumers at, and actually before, key decision points.  But thinking through the timing of specific decisions, it’s just so much more clear from this discussion (and the image below) what these inflection points are and why they matter so much.  We need to share with consumers this strong sense of why they and we can’t miss these valuable windows. 

Finally, it seems important to me that MassCEC is sharing information as to how other programs can do the same work.  This information sharing is critical.  One person or each group at a time, we must as in industry build demand, and we must have the workforce ready and eager to provide the products and services needed.

 

Clean Energy Lives Here – An Example on Doing the Necessary Work to Inform and Therefore Convince Consumers
 

So, how do we move forward to reach consumers and make these changes? Increasing consumer awareness and education through programs like “Clean Energy Lives Here” will be critical.  Currently Massachusetts-based, this public awareness program is one to watch for replicability and scalability. 

Massachusetts currently has 2.5 million buildings, with an estimated 3 million total expected by 2050. This projection means the state must reach a goal of transitioning about 100,000 buildings per year on average away from higher energy consumption and on-site combustion of fossil fuels. 

According to MassCEC, three key strategies will be needed with respect to residential buildings to meet the state’s carbon neutrality goals:

  • Deep weatherization – Energy efficiency measures, which protect a building from exterior elements and therefore, reduce energy consumption, optimize energy efficiency, and generally increase comfort and health, while also producing financial savings
  • Electrification – Switching from technologies that directly combust fossil fuels on site to those that rely on electricity
  • A transition to a cleaner electric grid – A cleaner grid affects homes of course, but is not in the control of residents

It will be critical to reach decision makers at key points in the life of a home and its critical energy-consuming systems.  Clearly, stock turnover through new home construction is an obvious and effective decision point.  But this won’t work of course for existing buildings.  The MassCEC team not only realized that major renovations and appliance turnover are key inflection points where consumers can be influenced.  It’s also not enough to reach consumers at the point of turnover – they need to be informed and ready to make more informed purchase decisions prior to equipment replacement, whether due to failure or retrofit/renovation decisions. 

 

Source: Massachusetts Clean Energy Center (MassCEC)

 

The above image puts in clear visual form this idea of the limited windows of opportunity for key electrification decisions.  Put plainly, clocks start ticking on inefficient technology decisions.  Whole buildings might be replaced every 20, 40 or 50 years, with major renovations at intervals in between.  Heating systems are replaced every 15-30 years. Building appliances might be replaced ever 15-30 years.  If consumers are not ready with a plan, they might make quick decisions as equipment fails, and then these decisions and the added carbon they cause are locked in until the next inflection point.  When a heater fails mid-winter, how many homeowners calmly call the HVAC company and ask for the most sustainable option?  If a car charging station wasn’t planned or installed, how many people might be dissuaded from buying an EV? This image shows that the systems and appliances that need to be decarbonized will only be up for replacement 2-3 times between now and 2050, meaning that each turnover is a critical moment to improve or fail to make progress.  A good visual is indeed worth 1000 words.

According to MassCEC’s Susan Mlodozeniec, it’s key to understand the consumer’s total experience and journey to becoming informed.  Consumers pass through 6 stages as they make a buying decision:

  • Awareness – knowing that a product or solution exists
  • Engagement/Research for own use
  • Evaluation - comparing specific options, prices, perhaps with professional input
  • Purchase
  • Post-Purchase – experience with the solution
  • Advocacy (if happy)

The journey is different for each system, and the current lack of awareness can lead to confusion (and some related anxiety).  How can we expect consumers to proceed with confidence and to find all of the information they need especially since these are often expensive, long-term decisions in areas where most of us are not expert?  The answer is that we really can’t expect this shift to magically happen.  Instead, we need to immediately start actively informing the public about choosing more energy efficient and carbon reducing solutions.  We need to create an informed public before the need arises, so they are prepared and will make the decision for the optimal outcome.  

Fortunately, the MassCEC organization is rolling up its sleeves and is digging in at a highly detailed level and is doing the work needed to help influence consumer demand.  The “Clean Energy Lives Here” program offers a multi-pronged public awareness approach which includes marketing materials, information, and resources to educate consumers about the comfort cost, and environmental benefits of switching to clean energy technologies and improving energy efficiency, including:

    • A web platform which contains:
      • Information on the technologies, and how they fit in a typical home
      • The benefits of switching
      • Cost data and incentive information
      • Connections to installers
      • Clean energy blogs for reporting experiences and success stories
      • Information about weatherization
      • A pledge consumers can make to transition to cleaner technologies
      • A certificate for accomplishing clean energy goals
    • Clean energy guides, which currently include:
      • An Introduction to the Clean Energy Home
      • Technologies for your Clean Energy Home
      • A Clean Energy Home Plan
    • Advertising, including social media campaigns, radio, and physical ads in visible locations throughout the state

The program is beginning with a focus on heating and cooling, hot water heating, cooking, dryers, and modes of transportation, but plans include expanding to additional technologies over time.  The idea is also to give consumers some time to proceed at their own pace, allowing an “over time” approach to learn and plan now, and to be ready to install new equipment at the end of a system’s useful life.  There’s a clear recognition that an “all at once” approach might be overwhelming.  There’s also a clear respect and desire to take on the perspective of the consumer – which should help the initiative achieve more of the desired results. 

 

Why Residential Decarbonization Matters
 

Put plainly, there is no path to carbon neutrality and mitigating the worst effects of climate change without addressing building energy consumption and emissions.  Buildings consume approximately 16% of energy globally, and almost 40% in developed economies such as the United States, with approximately 20% of US energy consumed by heating, cooling, and powering residential buildings.  Including materials and the construction process, buildings also general almost 40% of global greenhouse gas emissions.  With respect to the Paris Agreement, the National Academy of Sciences clearly asserts that the 80% emissions reduction target for 2050 (which many increasingly agree is not sufficient) can not be met without significant residential decarbonization, in the form of deep energy retrofits, a low-carbon energy transition, and living pattern related changes in per capita floor space.   Some good news is that greater energy efficiency in appliances and equipment and building code improvements have helped generate an approximately 19% energy intensity reduction in the residential building sector, but population growth, economic growth, and greater technology gains are expected to largely if not completely offset these improvements, depending also on the extent of changing demand due to climate change.  

 

https://architecture2030.org/wp-content/uploads/2019/03/Embodied-Pie.jpeg

Image via Architecture 2030

For residential buildings, much of the emissions are generated by off-site power generation.  The remainder is generated on site, primarily due to combustion of fossil fuels for heating, cooling, water heating, and cooking, and due to refrigerant leaks.  Heating, cooling, and water heating and water heating alone make up over half of the average US home energy bill. Lighting also presents a significant opportunity for energy and cost savings at approximately 1/5 of the typical energy bill.  Appliances should not be underestimated at just over 1/10 of the average bill, but home electronics, such as computers, chargers, televisions, and audio equipment make up about 1/5 of the average bill and are growing.

 

Image: https://www.energystar.gov/products/ask-the-expert/breaking-down-the-typical-utility-bill

Again, one challenge often seen as a building “elephant in the room” is that we must learn how to effectively decarbonize existing buildings.  In other words, even though we of course must build new structures sustainably and ideally to future carbon standards, we can not build ourselves out of this problem with better new buildings only. According to the Architecture 2030 Challenge and other organizations, about 2/3 of existing buildings will remain standing in 2050, with an average age of 70 years old.  It’s long been known we have to address the challenge presented by these buildings, but it’s not always clear how. 

It’s also worth noting that reducing energy consumption also has benefits beyond the property line.  According to the Building Efficiency Initiative, for every unit of energy saved onsite, as many as ten units of energy are saved in the generation and transmission processes.  So all of the effects can be magnified. 

The average US home lasts about 40 years, and often longer, so this means that design and construction decisions such as home size, heating and cooling systems, and equipment are of course critical for new buildings.  If the window of opportunity is not leveraged to design and build better, this means these buildings will waste energy needlessly, will be more costly to operate, and may suffer from lower air quality and comfort levels, without a subsequent retrofit or renovation that could have been avoided. 

If the opportunity is missed during construction or the building already exists, this means that reductions will need to occur through some type of renovation or during appliance replacement, whether naturally occurring due to failure or early due to a renovation or preference change.  A home sale, renovation, and/or appliance change are therefore key inflection points for decarbonization, as these decision points represent the ideal opportunities for replacing fossil fuel burning and less efficient equipment with lower energy consuming and therefore lower carbon generating technologies.

What are top benefits to lowering carbon emissions and saving energy?

  • Energy Savings
  • Improved thermal comfort
  • Better moisture control
  • Improved air quality
  • Better weather resistance
  • Emissions reductions/pollution reduction

In addition to saving money due to lower energy consumption, cleaner energy decisions result in increased comfort and a number of health and other benefits due to air quality and moisture control.  The home is more weather resistant, and of course pollution is reduced as well.

However, there are significant barriers to decarbonization and electrification, and all of these have policy and educational ramifications:

  • Up front costs: Many people aren’t able to balance long term savings with the need to expend the funds now
  • Investment/beneficiary mismatch:  Often, the entity that controls the energy and appliance decisions is not the same as the occupant who will benefit from or experience the results.  One top example is a builder who might need to spend more to build an efficient home but who will not be present to experience the savings.  Another example is a landlord who might not pay utilities, and is therefore less incentivized to invest in energy efficient changes.  Interestingly, many commercial property management organizations have moved in the direction of better energy decisions, as this attribute makes commercial space rent faster and command greater premiums.
  • Resistance:  Resistance might include resistance to change, or brands people might be more used to seeing. Resistance can also include privacy concerns with newer smart technology devices. 

A combination of solutions will be needed to overcome the barriers to residential decarbonization and to create the right incentives for builders/developers, owners and tenants to make energy efficient choices at key inflection points.  These include:

  • Comprehensive building retrofit programs with a priority on electrification, likely offered through states and utilities, with a focus on electrification and energy efficiency improvements. Effective programs will likely include:
    • Rebates/incentives for energy efficient technologies
    • Financing, including:
      • Bill neutrality (up front support from utilities so there is no extra expense)
      • Long term loans (such as property assessed clean energy or PACE loans)
    • Attention to equity and access, including:
      • Direct financial assistance for those who qualify
      • Addressing additional health and safety conditions while in the home (such as insulation, electrical issues, mold and moisture concerns)
  • Free or reduced cost energy audits, with follow up opportunities/vendor referrals for making improvements
  • Market growth support and direct financial R&D investments in cost-effective, energy efficient technology (heat pumps, thermal storage, renewables)
  • Workforce education and training to ensure the professionals are available, but also to raise awareness
  • Consumer education efforts, such as “Clean Energy Lives Here”
  • Consumer information – Real time energy use information, for example, such as smart meters
  • Goals & Measurement – Target setting and Benchmarking

Consumer education is a key part of this equation, but several additional elements here are worth highlighting.  Just as consumers are key to the conversation and decision process, it will be important for builders to believe these technologies make sense and to be able to grow their business profitably while selling and installing them.  Additionally, builders and other vendors need to be trained to effectively sell and install the new technologies properly.  Financial instruments and incentives will clearly also play a key role.  As will be a need to set and measure goals, even within homes.  Consumers who can see how much energy they are using as they recognize benefits and savings often set even higher goals for themselves and become advocates who influence others. 

An additional point is that we’re largely focused here on voluntary measures for home energy efficiency and decarbonization.  Building codes and energy codes will likely continue to mandate improved energy efficiency, though there’s often a lag for new code adoption.  Additionally, some changes may be legislated, especially over time.  Several communities have already reported positive results from implementing required energy disclosure or energy assessments at the point of sale for real estate transactions, for example.  Due in part due to resistance on the part of the real estate industry, progress on this type of legislation is slow.

Using less energy per capita is of course another consideration.  One thought is that home sizes might start to decrease in the US and globally as awareness of energy efficiency and decarbonization grows, and also as it becomes clear this is part of a path towards reaching carbon reduction goals.  Smart technologies which provide use and savings information can again help convince consumers to reduce energy use on their own, as can demand-based pricing, which encourages consumers to use less energy at least at at peak times through pricing mechanisms.

Additional good news is that clean energy solutions are win-win.  And, there are growing efforts to change consumer behavior.  According to Deloitte, 60% of power utilities surveyed reported that they currently offer some kind of advocacy or incentive program to electrify buildings.  State programs are also on the rise.  In addition to MassCEC efforts, the American Council for an Energy Efficient Economy (ACEEE) gathered data from 22 programs promoting the electrification of space heating in homes.  As of June 2020, budgets for these programs were up 70% over the prior year, at almost $110 million.  This is an emerging type of program; indeed, MassCEC’s “Clean Energy Lives Here” program was launched on Earth Day this year.  ACEEE reports that programs like these are currently more developed on the West Coast and in the Northeast, but they are expanding.  These programs are mostly offered by utilities but some are run by states, cities, and independent organizations designated by states.  In the future, we at Rate It Green look forward to reporting more thoroughly on the success and lessons of these programs as they evolve.

As with MassCEC’s “Clean Energy Lives Here” program, key to all of public awareness efforts is the recognition that consumers will play an essential role moving forward in decarbonizing residential buildings.  The first step in raising awareness is outreach, and it seems that MassCEC has an admirable and thorough program, as well as an understanding of the consumer research and purchasing journey.  The organization also has a sense of the urgency and critical nature of the timing and windows involved for optimal decisions.  Additional essential elements will include making these programs accessible/equitable and affordable, and ensuring that builders are also prepared to provide the needed services. 

It’s worth repeating that green building industry and clean energy industry members need to similarly reach out beyond industry walls, to share information and therefore grow demand for green building and clean energy products, services, and practices.  A lack of information will result in a lack of needed progress.  Consumers are clearly part of this equation, as are others in related industries who aren’t already informed.  The faster we get more information out, the sooner we can make progress towards mitigating the worst effects of climate change.

What other efforts are you aware of which inform people and companies about decarbonization and electrification, and directly enable and support these efforts? 


Click to read this discussion by Jacqueline at MassCEC about Planning a Climate-Friendly Home Makeover, including planning heating system replacements in advances, as well as an introduction to the "Clean Energy Lives Here" progra,.  


Additional Information:

MassCEC
“Clean Energy Lives Here”

Architecture 2030:
Why the Buildings Sector

Building Efficiency Initiative:
Why Focus on Existing Buildings

NEEP:
Pathways to Decarbonizing Existing Buildings

The Center for Climate and Energy Solutions (C2ES):
Decarbonizing US Buildings

Building Decarbonization Coalition: 
3 Approaches to Building Decarbonization

National Academy of Sciences:
The Carbon Footprint of Household Energy in the United States

American Council for an Energy Efficient Economy (ACEEE):
Programs to Electrify Space Heating in Homes and Buildings

Energy Star: 
Breaking Down the typical US Home Energy Bill

 

 

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Allison Friedman // Rate It Green Admin

I am excited to work with the Members of the Rate It Green Community to host conversations, create connections, and generally share information and help green builders everywhere. Please feel welcome to reach out to me directly with suggestions for improving Rate It Green.

 
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