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How do you get homeowners to change their mindsets and behaviors and become more energy efficient? A new report on Wednesday says the best policies are to provide incentives at times when homeowners selling or renovating their houses.

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How do you get homeowners to change their behavior and become more energy efficient? A new report on Wednesday says the best policies should offer incentives at times when homeowners are already examining their financial health because they are selling or renovating their houses or when they get notices of electric rate hikes.

The report by CalCEF, a San Francisco nonprofit for promoting clean energy research and investments, looks at California homes partly because the state has 8.4 million, or over 10 percent of the nation’s single-family homes, which in turn account for 85 percent of the carbon emissions from residential properties. The report also ties energy efficiency policy to economic development and argues that good energy efficiency programs will boost incomes and lift the depressed housing market, where one in three homes had sale value that was lower than the mortgage.

Regardless of whether energy efficiency programs can achieve those larger goals, figuring out more effective ways to raise public awareness and create more energy efficient homes are already worthy goals on their own. California has been putting in rules to force appliances and electronics manufacturers to roll out more efficient products since the late 1970s, and it requires the investor-owned utilities to put energy efficiency programs in place. Regulators like to point out that California is the most energy efficient state per capita.

A ranking by the American Council for an Energy-Efficient Economy last year put California in second place for its energy efficiency initiatives. Energy efficiency upgrades typically involve installing windows and other equipment that better insulate homes and use less energy to perform the same functions. While the work isn’t high tech, there are certainly opportunities for better software to audit energy use, streamline and improve the sales and installation work and monitor the results.

More can be done, the CalCEF report says, because roughly two out of three homes in California were built before better building codes that promote energy efficiency were in place in late 1970s. The best time to catch homeowners’ attention is when they are renovating or selling their homes, or when they are charging higher rates for increasing their electricity use (many utilities charge a baseline rate for a certain amount of usage and then higher rates for the energy used above that baseline). Here are some other recommended actions:

1. Show me the numbers. Homeowners should be required to disclose the energy cost of their homes while they sell their houses, and real estate listings should include that information as well. California also should come up with a system to rate how energy efficient each home is and include that information during real estate transactions.

2. Mandate efficiency retrofits. San Francisco and Berkeley have regulations requiring single-family homes to undergo an energy efficiency retrofit during their life time. Something similar should be implemented statewide and force homeowners to make their homes more energy efficient when they are selling homes or taking out permits to renovate them. There could be a list of energy efficiency measures that must be completed, or a mandate that whatever upgrades are taken will achieve certain measurable results.

3. How to pay for it. Energy efficiency advocates like to point to studies showing that more energy efficient homes can command higher selling prices. Still, California Public Utilities Commission estimates that a homeowner will have to spend an average of $7,200 to make his or her home 25 percent more energy efficient. CalCEF is advocating financing options beyond the typical use of credit cards and home equity loans. One program that has gotten a lot of support among clean power proponents is to fund retrofits through municipal bonds, and homeowners re-pay the costs through property tax payments. The idea isn’t new, but it’s not widely available. Sacramento is among some of the cities that have tried or are considering this financing option.

Another way to lower spending is to pool purchasing of retrofit equipment and services. This can be done through some kind of associations or even business that aggregate projects in order to negotiate better prices. CalCEF’s report also recommends offering incentives to reduce, say, permit fees or home sale closing costs, as ways to entice homeowners to undertake efficiency upgrades.

Photo courtesy of SolarCity

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  3. I agree that incentives can be a great way to change consumer behavior–from audit subsidies to retrofit rebates. Disclosure ordinances, too, can be effective, as evidenced by cities like Austin, TX. However, I don’t think we can ignore the importance of simply talking to town officials, neighbors, community leaders, etc. about the many benefits of home performance.

    The Claremont Home Energy Retrofit Project (aka CHERP), for example, has inspired almost 100 local homeowners to retrofit their homes without offering a municipal rebate. Sure, Energy Upgrade California doesn’t hurt, but nothing has been done to sweeten the deal beyond having a meaningful conversation. The underlying rationale is that people make home improvements when the value proposition is right, so show us the real benefits . . . comfort, savings, indoor air quality, durability, etc.

    Learn more about the CHERP story at http://www.energycircle.com/blog/2012/07/20/starting-energy-efficiency-program-your-town.

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