Benefits of Building Modernization

Camille Kadoch and Jessica Shipley, RAP

Humans have been building shelters for homes and other uses for over 400,000 years.1 As building science and technology has evolved, these structures have become stronger, more efficient and healthier places. That continues today with efficiency upgrades such as improvements to building envelopes as well as electrification of space- and water-heating systems, which can reduce the amount of energy needed, save consumers money, improve occupants’ comfort and health, and lower peak electricity demand.2 Today, modern homes and buildings that are energy-efficient and electrified provide a variety of benefits to the people who live and work in them, to society at large and to the electric grid.

Cost savings: When homes and buildings are energy-efficient, they use less energy to heat and cool and to run appliances. Efficiency upgrades are a straightforward tool to reduce utility bills by minimizing wasted energy from inefficient and under-weatherized buildings.3 Opportunities to save are important in an era of rising costs, particularly when almost 30% of U.S. households report that they had difficulty paying their energy bill or that they had to keep their home at an unsafe temperature because of energy prices.4 The U.S. Department of Energy estimates that the typical household can save 25% on utility bills with energy efficiency measures, which amounts to more than $2,200 annually.5 Beneficial electrificationbeneficial electrification Electrification that saves customers money, enables better grid management and reduces negative environmental impacts. of homes and other buildings will likely increase electricity use, but it will decrease overall energy use and has the potential to lower household energy bills, because electrified appliances are more efficient.6,7 Electrification of heating, cooling and appliances could help households save $1,050 to $2,600 annually.8 Studies indicate that 85% of U.S. households would save money if they electrified furnaces and water heaters.9

Better health for building occupants: Inefficient homes with poorly sealed building envelopes can allow in pests, moisture, air pollution and other stressors that can cause or exacerbate health problems.10 These conditions, coupled with inconsistent indoor temperatures, can lead to building-related illnesses such as asthma, headaches and fatigue. Low-income families living in unhealthy homes have disproportionately high rates of ailments such as asthma, heart attacks, strokes and high blood pressure.11 Weatherization can also save lives when extreme heat or cold hits and improve quality of life and health at all other times.12,13 Electrification also provides health benefits. Research has shown that the inhalation of indoor air pollutants is dangerous for health and can cause early deaths.14 Data from the U.S. Environmental Protection Agency indicate that heating and cooling in homes results in more nitrogen oxide emissions than do power plants.15 These harms to health can be avoided with proactive building modernization measures. RMI has found that states can avoid between 4,000 and 300,000 negative health outcomes (ranging from reduced activity days to death) in 2030 if they ambitiously use the provisions in the Inflation Reduction Act.16

Photo by AllGo on Unsplash

Reduced energy burden and increased energy equity: Energy burden is the percentage of household income spent on home energy bills. Low-income households spend three times more of their income on energy costs than the median spending of households above the low-income threshold.17 Modernizing homes and other buildings, with a particular focus on low-income and overburdened communitiesoverburdened communities “Minority, low-income, tribal, or indigenous populations or geographic locations in the United States that potentially experience disproportionate environmental harms and risks. This disproportionality can be as a result of greater vulnerability to environmental hazards, lack of opportunity for public participation, or other factors” (U.S. Environmental Protection Agency). Largely synonymous terms include “marginalized,” “front-line,” “underserved” and “environmental justice” communities., to be more efficient and electrified will bring cleaner air and healthier indoor environments. It also expands access to affordable clean energy and energy efficiency to reduce monthly energy bills for pollution-burdened communities.18

Reduced carbon emissions: Modernizing homes and other buildings is essential to reducing carbon emissions and promoting the transition to clean energy. Household energy use is responsible for approximately 20% of greenhouse gas emissions in the United States,19 and the total buildings sector, including commercial and industrial buildings, accounts for 34% of U.S. greenhouse gas emissions.20 Combining energy efficiency building improvements with efficient electrified appliances can drastically decrease carbon emissions from buildings.

Job growth: Interest in new technologies and incentives from state and federal legislation are spurring home and building owners to implement energy efficiency and electrification measures. This in turn creates jobs. Rewiring America projects that demand for household electrification measures driven by federal and state incentives and increased interest from consumers will generate 462,430 additional installation jobs, 80,000 manufacturing jobs and 800,000 indirect and induced jobs.21 A 2020 study from the U.S. Bureau of Labor Statistics predicted 13% job growth for heating, ventilation and air-conditioning technicians, which is 2.5 times the national growth average for the next decade.22 The energy efficiency sector already employs more than 2.1 million Americans and was projected to grow 3% per year before the pandemic.23 The Inflation Reduction Act provides even more opportunity, as analysis from RMI shows that each state could see between 2,000 and 100,000 new jobs (measured in job-years) in 2030 where states ambitiously use the provisions in the law.24 Growing demand for building modernization measures is projected to create a bottleneck as it encounters an increasingly narrow pool of skilled workers. Our toolkit’s workforce development section includes a variety of options states have for tackling that bottleneck, keeping building modernization moving while creating valuable employment opportunities.

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