U.K. Energy Efficiency Program Fails Like California’s

Energy-Efficient-Upgrades-to-Existing-HomesThe United Kingdom has been a leader on encouraging building owners to upgrade the energy performance of their properties.  The country mandates disclosure of building energy performance during sale or lease to make new owners aware of the inefficiencies.  And it launched the “Green Deal” program in 2013:

The scheme aimed to encourage millions of households to take out loans to fund the cost of work such as installing insulation or new boilers, with the loans paid back in instalments on their energy bills.  It was marketed around the idea that the household would end up better off, because the repayments would be lower than savings the household enjoyed from being more energy efficient.

But things didn’t go as planned:

[I]t has been beset by problems from the outset, with high interest rates on loans widely regarded as unattractive, and ministers forced to admit that savings were not guaranteed.  Fewer than 4,000 households had signed up for ‘Green Deals’ by the end of July.

The troubles with the UK program mirror the challenges that California has faced with its Energy Upgrade program:

According to an analysis of state data by the San Francisco Chronicle, California has only supported 12,200 home efficiency retrofits under its Energy Upgrade California program since 2011. The stated goal of the program is to service over 100,000 homes.

The culprit in California is the complex administrative process to qualify for the rebates and incentives. I know from personal experience. When I tried to access the financial incentives from Energy Upgrade California when I wanted to add insulation to my attic, the program required an expensive energy audit both before and after, even though I had already had an audit done the calendar year before. So I just skipped the audit and the incentives entirely but still got the work done.

Cracking this nut is difficult. Each building is different, and even though the savings are potentially significant, many property owners don’t want to deal with the hassle or expense of an upgrade to the building. Maybe California and the UK can learn from each other, because we’re definitely going to need to make the process and incentives as seamless as possible to encourage people to undertake these upgrades.


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