Selling Energy Efficiency to Reluctant Americans

Homeowners have done some energy efficiency improvements, but they haven’t seen results in the form of lower energy bills, and so they blame their utility and decide energy-efficient improvements aren’t worth it.

October 05, 2014
Building Science: Selling Energy Efficiency to Reluctant Americans

In the Shelton Group study, the stated motivation for having an energy-efficient home is to save money, and the stated obstacle to embracing energy efficiency is upfront cost.

Remodelers, you have your work cut out for you. Most Americans flat-out don’t think they need to do anything else to make their homes more energy efficient or sustainable. They simply don’t think they have a problem. Furthermore, most Americans don’t believe the value proposition of energy efficiency. Research conducted by Shelton Group, Knoxville, Tenn., shows energy-efficient purchases and actions are down across the board, and it’s not for lack of concern.

It is about misperceptions, misunderstandings, and misplaced blame.

We know 80 percent of Americans think they don’t use more electricity than they did five years ago, and almost half think their homes are already energy efficient. Yet, 59 percent say their bills have gone up.

Homeowners have done some energy efficiency improvements, but they haven’t seen results in the form of lower energy bills, and so they blame their utility and decide energy-efficient improvements aren’t worth it. Even though Shelton Group’s most recent Energy Pulse study revealed “improving resale value” as a key driver for homeowners to make improvements to their homes, and that this would be a great message to get homeowners to make energy-efficient improvements, most homeowners don’t believe energy efficiency does in fact boost resale value.

The real estate industry has done an excellent job of pounding into the collective consciousness that we will improve resale value by upgrading the look of our kitchens and bathrooms. The remodeling industry simply has not done a good enough job of pounding into the collective consciousness that we will improve resale value by upgrading the energy efficiency of our homes. And that is, in fact, true.

A recent California Berkeley/UCLA study of 1.6 million home transactions found that green labeling improved selling price. Controlling for all other factors such as location, school district, crime rate, time period of sale, views, and amenities, researchers found the 4,321 homes sold with Energy Star, LEED, or GreenPoint Rated labels commanded an average price premium of 9 percent.

Americans are not clued in to this juicy fact. Nor are they considering how the lack of energy-efficient improvements could perhaps screw up a sale. Basics like HVAC, water heater upgrades, or added insulation are not what new homeowners want to spend their money on. Most people don’t want to spend their initial remodeling budget on energy-efficient improvements—they want to spend it on the pretty things that make their house feel like their home.

What can you do as a remodeler?

1. Offer what homeowners want: instant rebates.

In the Shelton Group study, the stated motivation for having an energy-efficient home is to save money, and the stated obstacle to embracing energy efficiency is upfront cost. The answer is to connect homeowners with rebates and financing that requires little or nothing upfront.

2. Focus on the improvements Americans are most likely to make.

Remodeling a kitchen or bathroom is still at the top of the list, but replacing windows with more energy-efficient units has been a higher priority than replacing carpet or adding hardwood or tile since 2011. Embrace the fact that most Americans don’t see energy efficiency and aesthetic improvements as two separate silos the way those of us in the industry do. What they want is a better home, and a better home is one that feels good and looks good. So package aesthetic and energy-efficient improvements together.

3. Don’t just push products; push behavior changes.

The way forward is not to tell homeowners they’re wrong (nobody likes that) nor to try to educate or scare them into making efficient improvements. It’s about making them aware of their automatic behaviors and offering simple, clear steps forward. This will ensure homeowners adopt the energy-saving behaviors that will make the improvements pay off. PR
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Suzanne Shelton is president and CEO of Shelton Group, Knoxville, Tenn. She can be reached at 865.524.8385 or at sshelton@sheltongrp.com.
 

 

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