Energy efficiency means using less energy to provide the same service. A good example is when you replace a 60-watt incandescent light bulb with a 9-watt LED bulb. You get the same amount of light, but you’re using about 85% less energy. Energy efficiency is sometimes confused with energy conservation, which is reducing energy consumption by not using it. For instance, turning off the lights when you leave a room.
Both efficiency and conservation mean lower electric bills for consumers, as well as a host of social and environmental benefits. But while conservation is essentially a change in individual behavior, energy efficiency requires investment by either the individual or the utility. In other words, energy efficiency more of a public policy issue, and one that Appalachian Voices is committed to working on.
Energy efficiency is a key factor in economic prosperity, both at a local and national level. While the U.S. has been making overall progress, it has been slow, especially in Appalachia. Most Appalachian states rank in the bottom half of all states in terms of overall energy efficiency. That means we are not even close to realizing the social, economic and environmental benefits that result from using energy more efficiently.
The many benefits of energy efficiency
Energy efficiency reduces the many harmful environmental and health impacts of our reliance on dirty fossil fuels — from mountaintop removal coal mining and natural gas fracking, to toxic air emissions and leaking coal ash ponds. Using less energy also reduces greenhouse gases that contribute to climate change.
By the same token, efficiency brings tremendous economic benefits for families and communities. Making our homes and buildings more efficient creates local jobs in services such as energy audits, weatherization, and equipment installation, and also boosts manufacturing jobs to produce materials and equipment. Money that residents and businesses save on their energy bills often goes back into the local community. And for many residents, a more energy efficient home means more money to spend on other basic needs, as well as being more comfortable in the summer and winter months.
Energy efficiency measures can be implemented in homes, businesses, public buildings, manufacturing plants, power plants, modes of transportation — basically anywhere energy is used or produced. Upgrades include:
- Adding insulation to attics, floors and crawlspaces
- Sealing air leaks with caulk around windows, doors, chimneys and other spots
- Replacing electric furnaces with high-efficiency heat pumps, and keeping HVAC systems tuned up
- Replacing old, inefficient appliances with new EnergyStar-certified appliances
Take an Energy Star Home Energy Tips walkthrough to learn more about improving the energy efficiency of your home.
Energy efficiency made easy
One of the most effective ways to bring these many benefits to residents and communities is through “on-bill financing.” While interest in these programs is growing among electric utilities, relatively few currently offer them.
With on-bill financing, customers apply for financing from their utility to pay for efficiency upgrades, then repay the utility over time through an additional charge on their monthly electric bill. Meanwhile, they immediately benefit from a more comfortable home and reduced energy costs.
These programs particularly help low-income residents, who can least afford the upfront investment but who too often have inadequate housing and pay a vastly disproportionate part of their income on energy costs. This is an especially troubling trend in rural Appalachia, where poverty rates and electricity costs can be higher than average, sometimes putting families in a very difficult situation. The savings achieved on a homeowner’s power bill as a result of the improvements exceed the annual repayment, providing a net savings to the resident. This may not be the case for every home, but it is a goal most on-bill finance programs strive for.
Making it happen
On-bill finance programs have been successful in many co-op service areas around the country. More than 30 programs have been implemented, including “Help My House” in South Carolina and “How $mart” in Kentucky. There is no one-size-fits-all program; each one is designed for the specific needs of the community and the utility. However, an ideal program has certain characteristics:
- Available to all customers, including renters and businesses;
- A low- or zero-interest rate;
- A payback period between 10 and 15 years; and
- Designed so the customer’s savings exceed the repayment amount so the monthly bill is less.
Beginning in 2014, Appalachian Voices worked closely with communities and small businesses in western North Carolina to encourage Blue Ridge Electric Membership Corp. to offer on-bill financing to its customers. In April 2016, the co-op announced its Energy SAVER Loan Program, which achieves many of benefits we had envisioned. We continue to talk with Blue Ridge to promote and improve the program, and we’re also reaching out to communities served by other co-ops in western North Carolina and East Tennessee.
In 2014, the U.S. Department of Agriculture offered its first dedicated funding for energy efficiency, offering $250 million directly to rural electric co-ops and utilities through its new Energy Efficiency and Conservation Loan Program (EECLP). Among the agency’s goals are to reduce the nation’s electricity demand, reduce the use of fossil fuels, improve the efficiency of power grids, attract new business and create jobs in rural America.
Electricity providers who receive an EECLP loan can re-lend the money — through an on-bill financing program or other program — to residential and commercial customers to make energy efficiency improvements. Appalachian Voices is educating co-ops and other stakeholders about this important opportunity, and encouraging citizens to reach out to their utility and urge them to apply for EECLP funding.