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What’s Stopping Renters from Engaging in Energy?

Nathan Shannon's picture
President & CEO Smart Energy Consumer Collaborative

Nathan Shannon is the President and CEO of the Smart Energy Consumer Collaborative, whose mission is to advance consumer-friendly, consumer-safe smart energy through research, education and...

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  • Dec 16, 2021
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According to data from the Census Bureau, about 36 percent of the 122.8 million American households are rented rather than owned, meaning, for most electricity providers, renters comprise a significant segment of the residential customer base.

As the American Council for an Energy-Efficient Economy (ACEEE) learned in their “Energy Equity for Renters” study, “rental homes are typically less energy-efficient than others, on average, consuming 15 percent more energy per square foot than owner-occupied homes.” Further, more than one-third of renters have high energy burdens, spending more than six percent of their income on their energy bills.

To better understand who residential renters are and their attitudes, values and preferences regarding energy management activities and utility programs, the Smart Energy Consumer Collaborative (SECC) conducted the “Understanding the Needs and Wants of Renters” report, which included an online survey of 1,000 renters in the United States and in-depth interviews with residential landlords.

The research found that when it comes to saving energy at home, renters face a unique set of barriers.

One of the key insights reinforced by the study is that while homeowners have the luxury of viewing their home energy usage holistically, renters don’t control the structural integrity or systems of the places they rent. They can only control their behavior, program enrollment and relatively modest premise improvements.

However, there are several utility programs that strongly appeal to renters, and these customers can be effectively engaged with targeted outreach that acknowledges their limitations. For example, about 80 percent of all renters are interested in “energy efficiency rebates/credits”, “rate adjustments for energy efficiency” and “free or discounted energy efficiency products”, while about three-quarters express interest in monthly energy reports and access to their energy data.

There also seems to be some interest among renters in time-of-use rates and peak-time rebates, though, like the general population, renters seem to struggle with rate literacy.

Additionally, the research confirms a strong body of evidence that utility outreach efforts that align with trusted partners about subjects of personal interest to community members with shared values are far more likely to be persuasive for people open to expanding their understanding of energy. Partners may be faith-based communities, environmental groups, neighborhood associations, friends and family members.

When asked directly about barriers to participating in utility programs, survey respondents cited a host of reasons, ranging from lack of information, complexity of the process to enroll and lack of cash flow or necessary technology, which all align with the general population.

However, renters also harbor concerns that their landlords would either deny the request for an upgrade or would raise the rent after completing the upgrade, and these fears extend to higher-income and eco-conscious renters. Additionally, the interviews revealed that, given the highly competitive nature of many rental markets currently, landlords find it difficult to financially justify energy efficiency and weatherization improvements and admitted that major structural enhancements will often lead to higher rents.

Given this divergence in landlords’ and renters’ motivations, electricity providers have the potential to play an important role as intermediaries. For example, free home energy audits, which many providers already offer, could identify information to be shared with landlords. This could include simple improvements, such as weatherstripping, blow-in insulation and shutters/drapes, along with introductions to reputable local trade allies.

Additionally, the Pay As You Save® (PAYS) energy efficiency financing method can be utilized to fund retrofits, energy-efficient appliances and solar arrays. Rather than offer loans to pay for improvements and saddle customers with debt, PAYS uses an on-bill tariff tied to the home’s meter. The result is instant on-bill savings for customers and decreased load for the electricity provider – at no cost to the landlord. In existing programs, apartment renters have seen annual energy savings of up to 35 percent.

While renters may be more difficult to engage in some ways than homeowners, they are interested in energy efficiency, renewable energy, time-varying rates and other programs from their electricity providers and can be effectively reached with community-based strategies that address their specific needs. As communities continue to recover from the COVID-19 pandemic, providers can play a key role in helping this often-overlooked segment save money and meet their energy goals.

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Matt Chester's picture
Matt Chester on Dec 16, 2021

There also seems to be some interest among renters in time-of-use rates and peak-time rebates, though, like the general population, renters seem to struggle with rate literacy

How much of that blame would you assign on the utility, though? Are there readily available educational opportunities that they're not taking advantage of? 

Jim Stack's picture
Jim Stack on Dec 17, 2021

It is pretty simple. A renter is normally not a long time resudence  they move often. I'm sure they do not have long term ssvings and investment in mind. 

Mark Wilkinson's picture
Mark Wilkinson on Dec 27, 2021

Nathan - great post.  We look at this challenge of engaging with renters for EE constantly from the perspective of our engagement programs and marketplace solutions.  Your article give me some great food for thought about connecting appropriately with renters for energy efficiency matters.

 

Utility Marketplaces, for example, typically count smart thermostats as one of their biggest sellers, but most renters can't take advantage of those devices.  I can't imagine a renter getting permission from a landlord or property manager to replace an existing thermostat with a Nest, Honeywell or Ecobee to take more control of their biggest energy cost.

 

So, the utility marketplace really needs to offer renters different options for their efficiency goals, and present more renter-tuned content to help that population of customers.  Smartplugs with simple pairing to a customer's smart phone to give control over lights and electronics can have an impact.  A content marketing campaign to renters highlighting the benefits of smart plugs, paired with an offer and a link to the utility marketplace to make a purchase, and a snapshot of energy use before and after the installation of the devices supports customers at every stage of that buyer journey for a renter.  And, after HVAC costs, lighting and consumer electronics typically have the biggest impact on the utility bill, so renters will feel the benefits almost immediately.

 

Content specifically coordinated for renter-centric energy savings programs would be a great New Year's resolution for utilities in 2022, especially paired with a personalized email campaign to engage their renter customers and make it easy to find information about and enroll in EE programs designed with the renter in mind.  It's a great way for utilities to pave the way for greater engagement as this population of customers shifts in the future from renter to owner and keeps energy efficiency in mind.

Brian Lindamood's picture
Brian Lindamood on Jan 12, 2022

Excellent article and an important topic, thank you Nathan! A segmented communication strategy is critical to address the distinct needs and interests that different groups of utility customers have.

When reaching renters, efficiency messaging should focus on the benefits (e.g. a more comfortable home) that can be achieved with behavioral changes and low-impact investments. A separate communication plan is needed to engage with landlords and incentivize their participation in multifamily programs. Utilities can also market the benefits of energy efficient rental units to landlords. The goal is the same -- smarter energy use -- but the communication strategies for landlords and renters should be unique. 

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