Energy Audits: A Homeowner's Cheatsheet for Saving More Money
So, why aren’t people signing up?
WRITTEN BY JESSE HITCHCOCK ∙ HALIFAX, NOVA SCOTIA
Buildings are energy hogs.
Across North America, residential buildings alone are responsible for more than 10% of total energy consumption, and up to 80% of that is used for space heating (1), particularly in colder climate zones. It’s easy to characterize this as an unfortunate reality—we need to heat our homes. But that’s where energy efficiency comes in.
A lot of the energy we use in our homes is not actually doing meaningful work. It’s lost through cracks and gaps and drafty windows, or due to a heating system that’s simply not operating at peak efficiency. In a typical home, air leakage alone can account for 25–40% of the energy used for heating and cooling (2). We can also lose energy through incandescent light bulbs that produce as much heat as they do light—LEDs use up to 80% less energy (3)—and through all those appliances that help us make our coffees and charge our devices. But there’s an upside: where there’s a lot of waste, there are also a lot of opportunities to save energy (and money). But where is a homeowner supposed to start?
Energy audits provide homeowners with a custom, step-by-step guide on which upgrades will save them the most money at the lowest cost. They outline where the home is losing energy, and detail how much a homeowner stands to save. These reports are essentially a customized cheat sheet that tells people how to save money and be more comfortable—and they are very compelling. More than 60% of households that have an energy audit make an energy efficiency upgrade as a result(4). It makes total sense: when presented with a clear path toward savings, why wouldn’t you take action?
“When presented with a clear path toward savings, why wouldn’t you take action?”
Conventional energy audits still struggle to gain market penetration.
The problem is, only a fraction of homes have ever had an energy audit (4). Utilities and efficiency organizations understand this problem well—they’ve been tasked with delivering programs to help homeowners make energy efficiency upgrades for decades. In many cases, those programs include heavily-subsidized energy audits available to homeowners at low or no-cost. Removing the cost barrier should drive participation, but it doesn’t seem to be enough. So, what’s the problem? Why aren’t people signing up to save money?
Turns out, it comes down to people. Customers can have a sense of mistrust in their utilities—they are unsure of the programs’ motives and they often are skeptical that the energy efficiency options are actually free or subsidized (5). In other cases, customers simply don’t think that energy efficiency is something that is within their control. With low-income customers in particular, there can be an apprehension about letting a stranger into the home (5), and for some it’s simply just not feasible to stay home from work for two hours during the audit.
In order to resolve these tensions, utilities must innovate and find meaningful, new ways of engaging their customer base and delivering programs. The first step is putting the customer back in the driver’s seat. Empathy and empowerment have to be central in order to build trust and dispel decades of misconceptions. This is where technology can help. What’s more empowering than giving customers the tools they need to take action—right from the palm of their hands and in the comfort of their homes?
In other industries, technology has revolutionized the consumer experience to minimize discomfort and inconvenience while maintaining trust. People can shop from their phones and have next-day delivery with Amazon. They can pre-order groceries online and pick them up in-store. They can even order a pizza and track the delivery in real-time. In many cases, this is all done with one-click purchasing or a fingerprint scan. Consumers trust that the product is valuable and that the process is legitimate. Why should energy audits be any different?
“In other cases, customers simply don’t think that energy efficiency is something that is within their control.”
Digital energy audits, powered by modern technology, offer utilities new engagement opportunities.
The technology is here. Combining tools like machine learning and artificial intelligence with the wealth of available building science data makes it possible to accurately predict a building’s energy consumption through just a few key data points. This presents an opportunity for utilities to include and empower their customers directly. By letting customers tell you about their buildings—whenever and wherever is easiest for them—you are letting them lead their own customer journey while simultaneously providing them with proof-points that the savings are real. Instead of observing the energy audit from a distance, customers are now walking through their homes and envisioning the opportunities in real-time.
Utilities are inherently democratic institutions in that they must reliably deliver energy to every person in their service area. This also means that they can be inherently risk averse. A common source of unease when it comes to innovating in this space is the worry that incorporating technology will alienate customers who are not active digitally. The reality, though, is that 84 percent of the population in North America has a smartphone (6). This trend is expected to continue to grow through 2025 and in all industries (6), so it is timely for utilities to ask themselves “who will we alienate if we don’t innovate?”.
In the utility sector, there is a real opportunity for innovative technology to help reinvigorate and support essential programming that has been delivered by utilities and governments for decades. Moving into 2020 and beyond, incorporating technology into the planning and delivery of utility services will be imperative. It will also bring immense opportunity for both utilities and consumers by setting the stage for embarking on a new, customer-centric relationship.
Sources
1 Natural Resources Canada 2016, https://www.nrcan.gc.ca/energy-and-greenhouse-gas-emissions-ghgs/20063
2 Energy Star, https://www.energystar.gov/index.cfm?c=new_homes_features.hm_f_reduced_air_infiltration
3 US Department of Energy, https://www.energy.gov/energysaver/save-electricity-and-fuel/lighting-choices-save-you-money/how-energy-efficient-light
4 Statistics Canada, Environment Accounts and Statistics Division, Households and the Environment Survey, 2011 (Survey No. 3381), https://www150.statcan.gc.ca/n1/en/catalogue/11-526-X
5 The Essentials for Marketing to Low-Income Customers; Bringing Value to Customers Who Have Limited Resources. E-Source December 2018
6 The Mobile Economy, GSMA 2018 Report, https://www.gsma.com/mobileeconomy/wp-content/uploads/2018/02/The-Mobile-Economy-Global-2018.pdf