Low-income households pay more than 7 percent of their income on energy bills, three times that of higher income households, and if LMI households could reach average efficiency, their bills would be reduced by a third. However, many LMI households don’t have the savings or the credit to implement energy efficiency measures and aren’t aware of programs and incentives that could make efficiency more affordable.
Programs like the Low-Income Home Energy Assistance Program (LEAP) are operated by different federal departments, and a lack of coordination between programs in some areas make it difficult for LMI households to apply or leverage the programs to the best advantage. For example, if a household is consistently applying for LEAP funds, it may be an indication that weatherization would help lower the overall energy bill. However, if the same entity isn’t administering both programs in the community, then that connection made not be made.
Program awareness is made more difficult through a lack of trust in low-income neighbourhoods, where predatory financial lenders have made residents wary of free or low-cost measures and there is a reluctance to allow people from outside the community into their homes, said Tony Reames, director of the Urban Energy Justice Lab at the University of Michigan in Ann Arbor. Diversifying the workforce that conducts onsite energy efficiency measures and working with long-standing and trusted community partners, such as community centres or churches, is one way to elicit more trust and participation, he added.
Because of their struggles with affordability, one in five LMI households have reduced spending on food or medicine and 10 percent keep their homes at unsafe temperatures to reduce their energy bill. And, similar to food deserts, energy efficiency is often a costlier or more difficult to procure option in low-income neighbourhoods than in more affluent neighbourhoods. Many low-income communities have older homes that have not been updated because systemic policies such as redlining, resulting in housing stock that has poor efficiency.
Legislators and regulators also expect utilities to include energy efficiency programs for LMI households in their portfolios. A partnership with HomeServe can help proactively address energy efficiency and safety for your LMI customers with a suite of optional home repair policies that cover every energy contingency, from gas lines to exterior electric to HVAC and water heaters.
LMI households will often not address maintenance and repair issues, even if it means their whole home systems are not working efficiently, because they can’t afford to address them. For example, an annual HVAC system tune-up can ensure that systems are working at an optimal level and that small issued are addressed before they become big problems. Water heaters also require regular maintenance and lose efficiency over time, with most having only a useable lifespan of only 10 years.
HomeServe policies can address all these issues for your LMI customers and help them keep their home energy systems in the best shape possible. For more information about how we can help your customers improve their energy efficiency, contact us.
