Household benefits from energy efficiency retrofits: Implications for net zero housing policy

Abstract

Maintaining household welfare in the transition to a net zero economy is critical to the public acceptance of climate policy. A challenge in meeting this goal is our incomplete understanding of the distribution of household-level benefits from policies designed to reduce greenhouse gases in residential buildings. We provide new insights on key variables that contribute to household and social welfare by quantifying both the level and distribution of energy savings, bill savings, and rebates disbursed from Canada’s national energy efficiency retrofit program. Using a unique dataset consisting of electricity and natural gas consumption from all single-family houses in a Canadian city, we find that adopted retrofits reduce natural gas consumption for up to 10 years in the average participating house by about 20%. Whole-envelope retrofits reduce natural gas consumption by 35%. However, these savings represent only about half of pre-retrofit predicted savings, and several recommended retrofits save zero energy. While energy bill savings exhibit a modest peak among some lower wealth properties, retrofit rebates were disbursed equally across the house wealth distribution.