Do energy efficiency investments pay off?
A new study from a University of Chicago economic think tank casts doubt on the effectiveness of energy efficiency work done through federal Weatherization Assistance Program.
Economists from the institute studied 30,000 households in Michigan involved in one of the country’s largest residential weatherization program, which are designed to help low-income families replace heating equipment, upgrade insulation and seal leaks around windows and doors.
The research paper from the Becker Friedman Institute says the upfront costs of efficiency upgrades averaged $5,000, but produced an average of $2,400 in energy savings per household over the lifetime of the upgrades.
While the work did help these households save energy, the actual savings was significantly less than projected savings.
“Even when accounting for the broader societal benefits of energy efficiency investments, the costs still substantially outweigh the benefits; the average rate of return is approximately -9.5 percent annually,” the authors state.