A new report by the Regulatory Assistance Project (RAP) characterizes and quantifies the benefits of thermal efficiency programs, with an emphasis on the benefits of reducing the energy burden of low-income households. Thermal Efficiency for Low-Income Households in Vermont recommends a series of policies to improve energy efficiency and alleviate fuel poverty for Vermont’s low-income families.

“An estimated 125,000 Vermonters live in fuel poverty and make difficult choices between ensuring household health and comfort, and meeting other basic needs such as food, medical expenses, and education,” said Riley Allen, director of research at RAP and author of the report. “Lowering their fuel bills through energy efficiency frees up money to meet these needs, improves school and work productivity, and improves the local economy.”

The report finds that every dollar invested in thermal efficiency by the state yields more than two dollars in benefits. These benefits include lower heating bills, avoided health consequences (e.g. cold-related deaths), better air quality, and local job creation. Reducing the fuel burden of low-income households also frees up family income for other essential needs, and has the potential to reduce the need for other public services. Thermal Efficiency for Low-Income Households in Vermont quantifies these benefits and encourages policymakers and program administrators to recognize them in cost-benefit analyses.

Although Vermont has well-established and successful efficiency programs, low-income households are particularly difficult to reach for several reasons. First, access to capital to invest in efficiency measures is limited – those who own their homes typically have no savings to draw upon and do not qualify for traditional loans. Second, almost half of these households are renters who do not have control over the building and heating appliances. Third, public investment in energy efficiency relies on screening tools that undervalue the difficult-to-define, non-energy benefits. As an example, the Weatherization Assistance Program, aimed at improving the efficiency of low-income households, devotes 15 percent of its budget to addressing health- and safety-related concerns, but does not account for the benefits of these investments in the screening analysis. Benefits that are difficult to quantify should also be fully recognized.

To overcome these challenges, Mr. Allen recommends strengthening building energy codes and disclosure requirements, expanding the commitment to low-income households in delivering efficiency resources under formal utility and provider programs, establishing a binding efficiency standard for non-regulated fuels, enabling new markets for efficiency services, and expanding successful efficiency programs within the state. These policies typically improve thermal efficiency for households across the income spectrum, and many can also be tailored to reach low-income households.

Thermal Efficiency for Low-Income Households in Vermont was written with support from the High Meadows Fund.