by Peter Buttrick | Apr 11, 2022
Low- and Middle-Income (LMI) households have historically faced obstacles to becoming more energy efficient, despite the outsized impact efficiency measures would have for this population.
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 Weatherization Assistance Program and Low-Income Home Energy Assistance Program 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 LIHEAP 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 neighborhoods, 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 centers 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 neighborhoods than in more affluent neighborhoods. 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.
Some states are addressing the financial obstacle by allowing on-bill financing or recovery, which allows rate payers to pay for efficiency upgrades over time, such as New York’s “bill neutral” program, established through the Green Jobs-Green New York Act and the Power NY Act. The two-tier program offers private market loans to those who can meet the credit requirements and a second, utility-financed tier for those who can’t. Those on the utility-financed tier also receive a lower interest rate, based on an area’s median income.
Oregon’s Energy Efficiency and Sustainable Technology Act offers a state loan program with an on-bill financing, that offers loans between $2,000 and $30,000 for efficiency and includes a free energy audit as part of the financing process. The Help My House program, launched by a group of South Carolina co-operatives with U.S. Department of Agriculture Rural Economic Development Loan and Grant Program funding, also utilizes on-bill financing to fund a whole-home energy efficiency approach. Those who participated in the pilot are paying off the 10-year loans through a surcharge on their bills. However, because they’ve saved so much through whole-home efficiency, there is an average $25 savings each month, even with the loan.
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.
by HomeServe USA | Jul 9, 2021
Jessica G. of Albuquerque was struggling with degenerative nerve disease and late-stage cancer, but she had the support of her extended family and her business, SOS of New Mexico, to keep her occupied.
As a long-time, second-generation business owner, she was able to continue to work running background checks out of a home office space, having taken over the business from her mother. Jessica also had the comfort of her extended family, including her mother, son, daughter and two grandchildren, surrounding and helping her.
Jessica didn’t have it easy, but she had a strong support network and fulfilling work.
Everything Goes Wrong at Once
Then came the day when the family found water spreading across the floor after the hot water heater had burst. “My son’s carpet was wet and we thought the dog’s water spilled, but you stepped on it and [half an inch] of water came to the top,” Jessica said.
The family received more bad news when they learned that their furnace needed expensive repairs as the winter months quickly approached. “Six [valves] went out at one time,” Jessica said. “It was starting to get cold at night, and my daughter has a newborn and a two-year-old.”
With a new baby in the home, the malfunctions had come at the worst possible time. The family couldn’t financially handle so much going wrong at once. “I didn’t know what I was going to do,” Jessica said.
People like Jessica, who face serious illness, are particularly financially vulnerable. Those battling cancer are two and a half times more likely to go bankrupt, even though approximately 75 percent have health insurance when they are diagnosed. Financial difficulty makes recovering even more difficult.
Turning to a Trusted Friend
Facing a winter with a faulty furnace and no hot water, Jessica turned to Eric Maxon, Steward’s Plumbing president, with whom she’d been a member of a business association.
“My first thought was Steward’s Plumbing,” Jessica said. “There’s no one in Albuquerque I trust more.”
Steward’s Plumbing had done Jessica’s plumbing work for years, because she trusted their competency and professionalism and they understood her home’s heating and plumbing systems. Having a plumber who is trustworthy and competent, without having to seek out and contact multiple plumbers to receive quotes, was important to her.
Steward’s Plumbing is a HomeServe USA network contractor, and Eric was familiar with the home repair company’s charitable arm, HomeServe Cares, which provides home repairs at no cost to those who qualify. “I’ve known Jessica for years,” Eric said. “We’ve worked together on several projects, and getting these repairs done would be life-changing for her and her family.”
A National Company Steps In to Help
In order to become a HomeServe network contractor, Steward’s Plumbing employees had to pass background checks and drug screenings, and the company’s insurance, license and certification was confirmed. In addition, the company must maintain an A rating with the Better Business Bureau and a high customer satisfaction percentage. HomeServe uses local contractors, because not only are they close by and convenient, but they are familiar with local permitting processes and building codes.
Eric reached out to HomeServe and proposed Jessica and her family as candidates for HomeServe Cares. HomeServe agreed to help the family and dispatched Steward’s Plumbing to replace the hot water heater and repair valves in the radiant heat furnace.
“I couldn’t believe he and HomeServe worked so diligently to make this happen for me,” Jessica said. “Thank you, HomeServe!”
To learn more about how we can help people in our community, contact us.
by Kimberly Dailey | May 5, 2020
Taking a cold bath is no fun, and the Martinez family of Florida found that out the hard way.
Only two years after the family, including their young children, moved into the home, Celinette noticed the water heater was leaky and rusty. Shortly thereafter, the entire family realized their hot showers didn’t stay hot for long.
“I just thought that we wouldn’t be able to afford a new [water heater], and we’d just get used to taking fast showers,” she said.
Replacing an electric water heater can cost from $1,000 to $1,600, with a gas-powered one costing an estimated $1,000 to $1,400 – a bill that can be overwhelming to homeowners with limited funds or a fixed income, especially as the economy recovers. Unfortunately, water heaters are one system that needs to be replaced more frequently – every eight to 12 years for tank-style heaters and approximately every 15 to 20 for a tankless version. That lifespan can be shortened if an area has hard water or the water heater is located in an unheated area where the heater has to labor harder in the winter months. Tank-style water heaters should have the tank drained and the sediment washed out regularly, but many homeowners aren’t aware of this maintenance chore
When a water heater is approaching the end of its useable lifespan, a cracked tank may leak and cause rusting – just the situation the Martinez family found themselves in. Many other homeowners are positioned to find themselves in similar situations – 40 percent of Americans can’t afford a $400 emergency expense according to the Federal Reserve Report on the Economic Well-Being of U.S. Households.
Fortunately for the Martinez family, HomeServe was able to help replace the water heater at no cost to them through the HomeServe Cares Foundation’s Caring for People program and they’re enjoying hot showers again. Caring for People provides pro bono emergency home repairs that impact safety, health and quality of life to qualifying homeowners.
“I was ecstatic and super grateful for the opportunity to have this installed in my house,” Celinette said. “When I heard it was a high-efficiency water heater, I realized I’m going to save a lot of money on my water bill.”
For information on partnering with us to offer your energy consumers peace of mind and the HomeServe Cares Foundation, contact us.