Pathways to Net Zero: Financing Strategies For Low-Income Homeowners

Abstract

Housing retrofits are crucial for accomplishing national housing sector decarbonization goals. Single measure retrofit improvements are not sufficient for low-income homes which are often in less-thanoptimal condition and are subsequently uncomfortable and expensive to operate. Comprehensive retrofit approaches are necessary to achieve the energy efficiency targets for the aging housing stock. Historic educational and economic barriers pose challenges for incentivizing low-income homeowners to retrofit their homes. Proactive strategizing that considers both educational and economic factors are needed to see increased retrofit adoption amongst these groups. Policy makers need an understanding of retrofit impact for more effective resource allocation and homeowners need better incentives, and tools to conceptualize the benefits, time commitment and cost associated with deep retrofits. To address this problem, we present a retrofit pathway modeling framework to accurately predict the time required to achieve comprehensive retrofits for the homeowner. Taking retrofit cost and annual energy saving into account, we are proposing a new Government sponsored and led financing program inspired by the successful 401(k) retirement plans and level 529 saving programs, which offers an either 2x or 3x match to the annual investment the homeowner commits to saving each year to ensure low-income homeowners are accounted for in the journey to building sector decarbonization by 2050 and beyond. For a case study home in the Grove Park neighborhood located in Atlanta, Georgia, hot water heat pump retrofits are the most impactful on building annual energy use but retrofits that have low cost and short payback periods such as installing LED light fixtures and low-flow showerheads are the recommended have the largest potential for shortening the years required to achieve comprehensive retrofits and therefore, are recommended for policy makers to incentivize in the community. Strategic financing can be used to ensure a financially feasible pathways for homeowners with varying annual budget amounts. For the example home, the program allows homeowners who invest only $50 annually to achieve comprehensive retrofits four times faster than if they only utilize existing incentive programs. Individual building energy simulation combined with socioeconomic analyses are needed to meet the needs of diverse low-income communities across the United States.