For many homeowners, making energy-efficient upgrades is a no-brainer: Money-back promises include lower energy bills on average, specific savings per appliance, and tax credits from the Inflation Reduction Act.
But there are up-front and extra costs associated with maintaining energy-efficient upgrades—like smart home energy management or HVAC systems—and a majority of consumers say the savings don’t overcome those costs for at least five years.
A new survey from Home Energy Club, an electricity consumer advocacy organization, found that a fifth of the more than 1,000 homeowners they surveyed said they were saddled with more than $2,000 in “unexpected expenses” after they upgraded their home with energy-efficient appliances. Those costs, which include repairs, system upgrades, and home modifications, went up to $5,000 for one in 10 respondents. And though a majority of homeowners surveyed said that the energy efficient upgrades they made to their homes delivered the “expected savings,” that was only after a number of years.
All that said, energy savings—no matter how long it takes to overcome the initial upgrade costs—are only available to homeowners who can afford the up-front cost of buying energy-efficient equipment: Nearly three-fourths of respondents said “high up-front costs” have prevented them from making the switch.
Andrew Pattison, Colgate University professor of environmental studies, told Tech Brew that “any efficiency upgrade that you can do to your home allows you to capture that savings only if you can invest in the initial outlay,” and that the more money a person has, the more likely they’ll be able to dedicate time to installation.
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“Someone who makes more money probably has a job where they can come home at 3 o’clock to meet a technician than someone working shift work,” Pattison said. “There’s lots of layers to how being affluent can generally help you access government programs,” like the tax credits available to those who install energy-efficient upgrades.
Pattison’s analysis holds up in practice, too. According to an analysis from E&E News, households earning $100,000 or more a year received two-thirds of all the tax credits available for energy-efficient upgrades. Households earning $50,000 or less per year only received 6.7% of the credits.
So how can tax credits and rebates be more equitable? Pattison told Tech Brew they should be “income-determined” so that the less money a consumer has, the more of a rebate they would receive for using energy-efficient appliances in their homes.
“Just like some people who have even less resources might qualify for more social benefits in a different situation,” Pattison said.
But as the Trump administration may not be keen on that—in an executive order, Trump ordered all federal agencies to “immediately pause the disbursement” of IRA funding—there are still actions companies can take to help lower-income homeowners access energy-efficient tax credits.
Pattison told Tech Brew he envisioned partnerships between utility companies and green appliance manufacturers that better advertise appliances that would lead to credits and rebates—which could be particularly beneficial given that Home Energy Club found that almost two in five people didn’t know that energy-efficient tax credits and rebates exist.