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Transforming U.S. Homes for a Greener Future: Homeowner Decarbonization Opportunities

The urgent need to address climate change has never been more clear. Acknowledging the role housing plays in the total emissions picture is imperative to dedicating the right resources and strategies to the fight. 


In the United States, single-family homes contribute a meaningful share of carbon emissions. Roughly 20% of total Greenhouse Gas (GHG) emissions in the U.S. are related to home energy consumption. If U.S. homes were their own country, they would be the sixth largest GHG emitter in the world, above countries like Brazil and Germany. 


While that figure may be staggering, it also presents an opportunity. The good news is we have the technology today that allows us to reduce U.S. home emissions. The challenge of implementing that technology in homes at scale is complex, both because the homes themselves are different - size, age, location, building characteristics, equipment - and because each homeowner and family has different priorities, awareness levels, and ability to navigate energy efficiency on their own. 


In order to identify regions and specific homes with the greatest opportunity for decarbonization today, we’ve analyzed a series of energy consumption and homeowner motivation variables. One example trend analysis is our state-by-state view of combined emissions and homeowner impact - identifying states with the greatest potential to reduce both emissions and homeowner energy costs.


Carbon Emissions from Single-Family Homes: A Closer Look

The typical household in the United States emits roughly 7.8 metric tons of carbon per year related to energy use, 70% more than emissions from driving a gas-powered car. A specific home’s energy emissions profile is driven by the quantity of energy consumed and the sources of that energy.  Several factors contribute to how much energy is consumed, including property characteristics (size, age, structure), location (climate, weather), appliances and equipment, and household size and behavior. Fuel sources can also vary by home (gas boiler, electric furnace) and availability (electricity powered by fossil fuels vs renewables). No two homes will have exactly the same energy and emissions profile, but analyzing trends allows us to consider different approaches. 


For example, from an energy consumption perspective, square footage and year built provide helpful indicators of a home’s emissions profile. Larger, older homes generally consume more energy due to their size, building materials, and older-generation equipment. Consequently, these homes typically emit larger quantities of carbon than newer homes with more up-to-date features and equipment. Another indicator of energy consumption can be location. Homes in moderate or warm climates generally consume less energy than homes in cold climates because they don’t require as much heating. 


Housing characteristics across states reflect some of the overall national demographic and technological shifts over time as well. The Northeast has some of the oldest homes and a large share of homes heated by fossil fuels. The advent of modern air conditioning in the mid-20th century coincides with significant population growth in the South and West and, consequently, newer housing stock that is more often heated and cooled by electric systems. 


Sample home examples for illustrative purposes only


Decarbonization Opportunities Across States

Understanding the emissions profile of a home is the first component of our state trend analysis. The second component involves user research to understand homeowner motivations. Each homeowner and family will have their own motivations and level of interest in energy efficiency. Some may be motivated to make energy efficiency upgrades in order to increase the comfort or air quality of their home, while others may be interested in maintaining up-to-date equipment, and still others have climate change related motivations. However, one motivator that most homeowners express interest in is the potential for energy bill cost savings from reduced energy use. 


With cost as a shared homeowner motivation, we’ve implemented a multi-factor ranking that compares states based on the potential for the greatest carbon emissions reductions (excluding individual solar installations) and the greatest potential for consumer home energy cost savings. The highest possible ranking would go to a state with the greatest potential for emissions reduction and the most favorable electricity pricing relative to alternatives (assuming the greatest long-term impact from home electrification). Some of the core factors that go into the rankings include:

Criteria

Why it matters?

Home age

Older homes generally consume more energy and therefore emit more carbon. Newer homes adhere to enhanced building and energy codes and are more likely to have more modern equipment and materials.

Fossil fuel heating

All else equal, homes heated by fossil fuels emit more than homes heated by electricity, and heating accounts for >40% of energy use in a home

Electricity supply

States with utilities that have a higher share of electricity generation through clean energy sources like wind and solar will experience a greater reduction in carbon emissions with home electrification

Transition to cleaner electricity supply

Many states and utilities are in the process of transitioning more supply to renewables. Homes in those states have the potential for greater emissions reductions over time as the electricity supply continues to ‘green’

Residential costs of energy

Consumers are sensitive to changes in their monthly energy costs. We consider consumer price differences between fossil fuels and electricity. If, for example, heating with fossil fuels is significantly cheaper than electricity, we assume that consumers are less likely to electrify heating and cooling.


How States Compare

From this model, we start to draw regional takeaways about where emissions reduction potential and homeowner motivations align - and where some of the greatest impacts may lie. It’s important to note that this analysis serves as a guide, not a simple answer. The approach allows us to continue to layer additional information to construct programs for a given area, such as additional homeowner incentives (rebate and tax credit programs) and disincentives (upfront costs). It’s also interesting to note that the multifactor nature of the analysis means that not all states are at the ‘top’ for the same reasons. 


Consider Vermont and Rhode Island, for instance. Both states rank within the top 5 but for very different reasons. Of all 50 states, Rhode Island has the highest share of homes heated by fossil fuels and the second-highest share of homes built before 1980. Within Rhode Island, there is a significant opportunity for both emissions reductions and saving consumers money with upgrades. Vermont’s high ranking, on the other hand, has a lot to do with its electricity supply. Vermont has the greenest electricity grid in the country, so each electrified home has the greatest potential emissions reduction when switching from fossil fuels.


Markets like Ohio, Michigan, and New Hampshire may not rank the highest, but their older housing stock, high percentage of homes heated by oil or natural gas, and relatively favorable electricity pricing may make them good candidates for electrification projects that will optimize emissions and energy bill reductions.


The takeaway here isn’t that only markets with high decarbonization potential should be invested in, but rather that we can start identifying the states where homeowners have the greatest incentive and opportunity to decarbonize their homes and craft local strategies that best reflect the opportunities at hand.


We’re excited about the potential this type of top-down view can provide to those constructing decarbonization and community engagement programs. In order to achieve the significant and lasting change required, we need to devise clear action plans. At Homegrown, we believe that the challenge is substantial, but so are the opportunities for meaningful impact for communities. 


How Homegrown can help

At Homegrown, we partner with Single-family rental landlords, mortgage lenders, and short-term rental platforms to provide the essential data and tooling to benchmark and track emissions of their home portfolios alongside a suite of tools designed to optimize their portfolio and unlock financial incentives.


Specifically, we partner to: 

  • Benchmark and track carbon emissions at the asset and portfolio level

  • Identify highest ROI and emissions reduction for home energy upgrades

  • understand physical climate risk and track cost to maintain against climate forecasts

  • Educate renters and homeowners about their energy bill savings and how to operate new energy-efficient technologies

  • Accelerate access to sustainable financing for energy-efficient portfolios


 

Sources: This article includes information sourced from and published by the EPA, Department of Energy, EIA RECS, US Census Bureau, PNAS.

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