Consumers Want Energy Efficiency, But What Will They Do About It?Billy Pell
From how we make calls to how we track our health, technology has changed our lives completely in the last 30 years. At home, advancements in technology have helped make our homes more efficient. The average home in the U.S. now uses roughly 40% less energy overall than it did in 1970.
Despite this increase in efficiency, research at The Demand Institute reveals that consumers still view home energy efficiency as their top unmet need—spanning all ages and locations. A 2013 survey found 71% of households say energy efficiency is very important to them, but only 35% describe their home as being energy efficient—a 36% gap. This was the largest gap found across the 52 different characteristics asked about in the survey. And a more recent survey reveals that consumer concern about energy efficiency is growing.
As a result, consumers are looking for ways to be more efficient—76% of consumers plan to do something to make their home more energy efficient in the next three years, and they plan to spend as much as $240 billion to do so. This presents a big opportunity to help Americans better use energy.
All The More Reasons For Efficiency
Homes today are using less energy than 30 years ago thanks to more efficient home heating with better insulated homes and improved HVAC technology, as well as more energy efficient home appliances. But Americans are plugging in more electronic devices and appliances, and use of electricity grew strongly before leveling off around 2005.
In addition, utility bill increases have outpaced household income and other spending, and the average homeowner now spends close to $4500 a year on utilities. Renters’ bills are typically half those of homeowners but have grown significantly in the past 15 years. Not surprisingly, 88% of households say saving money on electric bills is their primary motivator for being more energy efficient.
It’s The Little Things
With the high cost of home energy bills, consumers are only willing to invest what they believe they can recoup in utility savings. The median annual U.S. household spend on improving home efficiency is just $250. And most expect payback in the next six years. Given the limited investment of time and money most consumers are willing to make, the most popular improvements are small jobs that cost little to nothing.
Efficiency On Whose Mind?
When it comes to increased efficiency, homeowners, more affluent households and younger households are leading the charge. With a deeper investment and more money to spend, it’s not surprising that these consumers are most likely to act in the next three years. In fact, the average homeowner plans to spend five times more than renters to spend on improvements, and high income households will spend more than three times the amount of lower income households. As a result, the gap in home efficiency will likely continue to widen, increasing the burden of utilities on lower income and renter households.
Still, opportunities abound to improve the gap for all consumers. The efficiency of new homes can be improved for both big homes, as well as multifamily and affordable construction. In addition, new technologies, such as “smart” thermostats, can help consumers better manage their energy use. And making these technologies removable can allow consumers to take these changes with them to new homes—something especially appealing to renters. However, in all cases, making a direct connection between the cost and expected savings of an improvement is essential with consumers’ focus tied so heavily to the bottom line.
This article was written by the staff at Nielsen, an industry research firm. You can read the original post here.