Homes and neighborhoods across the U.S. are ill-prepared for the increasing stresses of climate change, including extreme heat, wildfires, wind and flooding from intense storms, sea level rise, and water shortages. Newly built homes must adhere to stricter building codes, but the vast majority of Americans—especially low- and moderate-income households—live in older homes that were not designed for today’s climate. Energy bills are also a substantial burden for low-income households.
Additionally, residential energy use accounts for 20% of greenhouse gas emissions in the U.S., which further exacerbates these climate challenges. Developing a strategy to weatherize homes to protect residents’ safety, health, and financial well-being—as well as reduce greenhouse gas emissions—must be an essential part of the nation’s overall climate strategy.
Two of the Biden administration’s signature legislative successes—the Infrastructure Investment and Jobs Act and the Inflation Reduction Act—include substantial new funding to reduce energy use in existing homes and shift them toward cleaner sources of power. As these programs go into effect, policymakers can benefit from looking at the successes and limitations of existing weatherization policies, especially the Department of Energy’s Weatherization Assistance Program (WAP).
How do weatherization programs work?
WAP has several goals: to help low-income homeowners save on utility costs, reduce aggregate energy consumption, and reduce greenhouse gas emissions. Activities covered under WAP include adding insulation, replacing heating and/or cooling systems, air sealing, replacing doors and windows, as well as various repairs.
The federal government allocates WAP funds to states and localities, which then use the funds to pay for home improvements for roughly 35,000 low-income homeowners each year. The grants are based on need and can be combined with other federal, state, utility, and private resources, including the Low-Income Home Energy Assistance Program. Households with elderly residents, disabled people, or children are prioritized.
Weatherization’s benefits to households and society vary widely across the U.S.
Households living in weatherized homes save on average $223 to $283 a year; or, for every dollar invested in weatherization, $0.90 to $1.40 is gained in energy benefits. But the benefits to both households and society vary widely across geography, based on factors including local climate zones, physical characteristics of homes, energy prices, and the source of energy. Larger homes with older heating and cooling systems see greater energy savings from weatherization, as do homes in colder climates. Parts of the country where more residential energy comes from carbon-intensive sources (e.g., coal-fired power plants or home heating oil) yield greater reductions in greenhouse gas emissions, compared to regions where energy comes from renewable sources such as solar and wind.
Crucially, because of regional differences in energy prices, household savings on energy bills are not always correlated with the social benefits of reduced energy consumption or lower greenhouse gas emissions.
An important feature of weatherization is that energy auditors use a cost-benefit framework—the cost of weatherization divided by annual energy cost savings—to decide which home upgrades should be made. Investments such as window replacements, which take longer to pay off, are often excluded. Costs of construction materials and labor also vary widely across the U.S., so upgrades that pass the cost-benefit test in one region may not be approved in another. The use of cost-benefit analysis to decide whether low-income households receive weatherization support is highly unusual compared to other means-tested benefits such as food stamps, Medicaid, and housing vouchers.
Red tape excludes many eligible households from receiving assistance
One key measure of program effectiveness is the level of uptake among eligible participants: Do subsidies reach the targeted beneficiaries? By this measure, WAP fares very poorly. Few people apply for the program and even fewer complete the weatherization process. A study in Michigan found that, without additional advertising, only about 2% of likely eligible households signed up for the program. Another estimate found that only about 0.2% of eligible homes complete weatherization.
Like many other federal programs for low-income households, the application and screening processes for weatherization programs involve considerable paperwork. Households must provide utility bills, income documentation, social security cards, and proof of ownership. Wait times for scheduling a home energy audit can be over a year.
Some income-eligible households do not receive assistance because their homes have significant maintenance problems. In Philadelphia, roughly 25% to 50% of WAP applicants who get an energy audit are required to defer their weatherization until other repairs can be made. These repairs are usually related to structural issues, moisture/standing water, or mold, and can be well outside of an applicant’s budget. Weatherization is intended to improve building quality, but only for homes that are structurally sound and will remain habitable for many years; it is not a substitute for more comprehensive home repair and rehab.
To survive a changing climate, the U.S. needs to weatherize homes quickly, equitably, and at scale
A lesson from WAP is that allocating funds for weatherizing homes does not generate the desired energy savings if households cannot access the programs. Federal and state policymakers should focus on keeping application processes simple and transparent—combined with marketing and outreach—to implement the programs at scale. Additionally, to weatherize millions of older homes quickly, the U.S. needs more trained workers and an increased supply of essential parts, such as electric heat pumps.
Rental housing continues to be a blind spot for policymakers in designing energy-efficient retrofits. Landlords can use WAP to upgrade rental homes, but it is most often used by homeowners; in 2010, 80% of weatherized units were in one- to four-family homes. The Inflation Reduction Act’s subsidies for energy upgrades are structured as tax credits or rebates for homeowners—leaving out the one-third of Americans who rent their homes. The U.S. also needs a plan designed specifically to address energy efficiency and climate resilience for subsidized rental housing.
Whether some homes—and some locations—should not be eligible for climate-friendly retrofits is a knotty question for policymakers. Should taxpayers subsidize $30,000 of upgrades in heat pumps, solar panels, and insulation on a house with market value of $50,000, or one that is nearing the end of its usable life? What about in locations at high risk of wildfires or coastal storms, or in low-density, car-dependent suburbs? These choices pose enormous equity implications, because many low-income households live in poor-quality, lower-value homes in high-risk locations. Denying them access to weatherization programs without providing safer, healthier alternatives would compound current economic and racial disparities.
The newly enacted infrastructure and climate bills are excellent starting points to address vulnerabilities in the nation’s housing stock. Using lessons from past programs, attention should now turn to careful and thoughtful implementation.