The Power of Energy Efficiency: Expanding Access to Energy Efficiency Improvements for Low and Moderate Income North Carolina Households

By the South East Energy Efficiency Alliance and the North Carolina Justice Center

Improving energy efficiency can make energy more affordable, transform unhealthy buildings into comfortable homes, and create thousands of jobs. While there are opportunities across the residential, commercial, and industrial sectors, some of the greatest need and most profound gains can be made in low- and moderate-income housing. This report outlines why focusing on energy efficiency programs to serve North Carolinians of modest means can return benefits to everyone across the state, and discusses many of the steps we can take to increase adoption of energy efficiency in North Carolina.

Energy efficiency is one of the most cost-effective ways to meet our energy needs. Saving a kilowatt of electricity through improved efficiency is still generally cheaper than creating a new one from conventional or renewable sources, making many efficiency investments the best use of our energy dollars. The need to build new power plants to meet increasing demand is often a chief driver of increased utility rates, so scaling back the need for new generation capacity can make energy cheaper for everyone. This is particularly important here in North Carolina where family income spent on energy costs is comparatively high. While electricity rates themselves are relatively low in the state, our level of consumption is among the highest in the country. In 2014, residential consumers in North Carolina spent an average of $126.09 per month on energy bills—the 13th highest amount in the nation, supporting the need for additional energy efficiency.

The need for energy efficiency programs is particularly acute for low- and moderate-income households in North Carolina. Nationally, the energy cost burden is more than double for low-income households compared to median households, and low-income residents in the South face some of the highest burdens in the country. There is a racial disparity as well – with poverty particularly concentrated in communities of color, African-American and Latino households also tend to devote a larger share of their income to covering energy bills. Ultimately, the need is further compounded by the unfortunate fact that North Carolina had one of the highest poverty rates in the nation in 2015, leaving an unacceptably high share of the state’s households facing crippling energy costs.

Improving energy efficiency can create much needed jobs. While a great deal of media attention focuses on renewable energy technology firms or installers, energy efficiency actually accounts for the single largest share of jobs and companies in the clean energy space. In 2015, over 700 energy efficiency firms employed more than 13,000 North Carolinians, accounting for roughly one-half of all clean energy jobs in the state. Moreover, many jobs in energy efficiency services pay good wages and are accessible to individuals without extensive higher education credentials. Done right, energy efficiency programs can provide opportunities to secure a long-term career and job security to the populations that need it the most.

The economic return on energy efficiency investments extends well beyond the jobs created in repairing and retrofitting homes. Reducing energy costs gives households more disposable income to spend on other goods and services, creating broad economic ripple effects across the North Carolina economy. Recent analysis by the Southeast Energy Efficiency Alliance found that every $1 invested in selected energy efficiency programs in North Carolina generated $3.3 in additional economic activity, a solid economic return on investment.

Boosting energy efficiency can measurably improve the lives of low- and moderate-income North Carolinians in a variety of other ways. Making a home more energy efficient often makes it healthier and more comfortable.9 Far too many families in North Carolina can’t afford to heat their homes in the winter or cool them in the summer, leading to illnesses that keep parents out of work, holding children back in school, and straining already struggling families. All of these issues can be measurably addressed by energy efficiency programs that provide more humane and healthy homes for all North Carolinians.

While our state has made important strides to advance energy efficiency, many of the efforts to date have not adequately served the needs of low- and moderate-income North Carolinians. The overwhelming majority of North Carolinians support efforts to improve building energy efficiency,10 so the real challenge is to translate that support into further action.