WEATHERIZATION AND MINORITY ENERGY USE: ANl/CP--75431 A PRELIMINARY ANALYSIS _ .,_,, DE92 013047 _:,, Elizabeth V. Earl and Nancy E. Col.lins 2 MA_ u 61992 " INTRODUCTION Recent events in the Persian Gulf and intensified political support for environmental issues have led to a renewed national concern for energy saving policies and programs. Reduced residential energy consumption and expenditures, through conservation measures and efficiency improvements, are important goals of the Department of Energy (DOE) 1991/1992 National Energy Strategy. Several federal initiatives, DOE's Weatherization Assistance Program (WAP) and the weatherization aspect of the Department of Health and Human Services's Low-Income Home Energy Assistance Program (LIHEAP), aim to reduce energy consumption and expenditures by providing free weatherization or conservation measures to low-income households. The extent to which a weatherization measure improves the energy efficiency of a dwelling unit can be viewed as a function of the housing and appliance characteristics, the technical efficiency of the weatherization measure(s), and the behavior of the household, where each of these factors is determined by household economics, fuel prices, demographic characteristics, and climate (Hirst, 1981). As minority groups differ from non-minority groups in terms of household economics, demographic characteristics, and regional location, we would 1Work supported by the U.S. Department of Energy, Office of Minority Economic Impact, :'under contract W-31-109- Eng=38. r_l_frj,_ [ L R_r:_, ,k:: :Argonne National Laboratory (ANl.,). The submitted manur,Crlpt has been authored by a contractor of the U, S, Government under contract No, W-31.100wENG-38. Accordingly, the U, S. Government retains e nonexclus=ve, royalty.free license to publish or redroduce the published form oi this contribution, or allow others to do so, for U, S. Government purposes. ,"w..j DI,"_TRI_'_'TION OF THiS DOCOiviEN7 i_3 OkikiiviiTE[-..,
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WEATHERIZATION AND MINORITY ENERGY USE: ANl/CP--75431
A PRELIMINARY ANALYSIS _ .,_,, DE92 013047_:,,
Elizabeth V. Earl and Nancy E. Col.lins 2
MA_ u 61992 "INTRODUCTION
Recent events in the Persian Gulf and intensified political support for environmental issues
have led to a renewed national concern for energy saving policies and programs. Reduced
residential energy consumption and expenditures, through conservation measures and efficiency
improvements, are important goals of the Department of Energy (DOE) 1991/1992 National
Energy Strategy. Several federal initiatives, DOE's Weatherization Assistance Program (WAP)
and the weatherization aspect of the Department of Health and Human Services's Low-Income
Home Energy Assistance Program (LIHEAP), aim to reduce energy consumption and
expenditures by providing free weatherization or conservation measures to low-income
households. The extent to which a weatherization measure improves the energy efficiency of a
dwelling unit can be viewed as a function of the housing and appliance characteristics, the
technical efficiency of the weatherization measure(s), and the behavior of the household, where
each of these factors is determined by household economics, fuel prices, demographic
characteristics, and climate (Hirst, 1981). As minority groups differ from non-minority groups
in terms of household economics, demographic characteristics, and regional location, we would
1Work supported by the U.S. Department of Energy, Office of Minority Economic Impact,
:'under contract W-31-109- Eng=38. r_l_frj,_ [ LR_r:_,,k:::Argonne National Laboratory (ANl.,).
The submitted manur,Crlpt has been authoredby a contractor of the U, S, Governmentunder contract No, W-31.100wENG-38.
Accordingly, the U, S. Government retains enonexclus=ve, royalty.free license to publishor redroduce the published form oi thiscontribution, or allow others to do so, for
U, S. Government purposes.,"w..j
DI,"_TRI_'_'TION OF THiS DOCOiviEN7 i_3 OkikiiviiTE[-..,
,p
2
expect a given level of weatherization to differentially impact minority and non-minority
households.
This paper presents an analysis of the patterns of minority and non-minority energy
consumption with and without weatherization measures. The behavior of the household in
reponse to a weatherization-induced income gain is modeled using ANL's Minority Economic
Assessment Model (MEAM). Weatherization is then examined from a programmatic perspective
in light of the MEAM findings. This work is the first part of a larger analysis to assess the
economic impact of weatherization on minority households and to examine the reallocation of
LIHEAP funds to weatherization. Time and funding have limited the scope of this analysis; thus,
it should be judged as very preliminary. Several limitations of this analysis are discussed below.
The unit of analysis, the household, is examined at the national level. This has the effect of
missing differential impacts occurring at the regional level. Census regions differ greatly with
respect to climate, fuel mix, fuel prices, and most significant in terms of this analysis, minority
concentration. Specitically, Blacks are more concentrated in the South and less concentrated in
the West, relative to non-Blacks. Thus, national level household data will not capture the effects
of weatherization specific to the areas where minority concentration is greatest, lt is our intent
to extend our analysis to at least the Census region level.
This preliminary analysis compares the United States (US) Black population to the Majority
population (non-Black, non-Hispanic). In the future, we intend to extend the analysis to examine
other minorities, including Hispanics, Native Americans, and Asians. Other analyses will focus
on the elderly and handicapped -- groups targeted for WAP and LIHEAP participation.
OVERVIEW
WAP and LIHEAP provide eligible households with free materials and labor to install
weatherization or conservation measures to their residences. A typical participant household
at cumulative savings, we can compensate for the interaction between weatherization measures.
Applying weatherization measures often decreases the conservation potential of future
weatherization. For example, measures to improve the thermal integrity of the housing shell
(insulation, caulking, storm doors, and storm windows) change the household requirement for
space heating. Therefore, a new energy _fficient furnace would be operating in an environment
with a lower fuel demand and, therefor'_, the savings from the furnace would be lower than
without the thermal integrity improvement. We also assume there is no degradation of
weatherization materials once they have been inst'died; therefore, the initial savings will continue
through the 14-year time period.
TABLE 1. SELECTED WEATHERIZATION MEASURES ANDTHEIR PREDICTED ANNUAL ENERGY SAVINGS
WEATHERIZATION ANNUAL ENERGYTIME PERIOD MEASURE SAVINGS
1987-1989 attic insulation 14%
1989-1991 wall insulation 12%
1991-1993 4 storm windows 10%
1993-1995 caulk/weatherstrip 8%
1995-1997 2 storm doors 6%
1997-1999 upgrade water heater 4%
1999-2001 furnace tune-up 2%i ..= )
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Figure 3 graphically displays the decrease in energy consumption due to these energy
measures. The major feature of this graph is the cumulative nature of the weatherization
measures over time and the magnitude of the ultimate savings, 56% of the initial energy
consumption level. Energy expenditures will decrease by this same percent relative to non-
weatherization. If the MEAM base case 1987 Black household expenditure is used, total energy
savings over the 12-year time period amount to $2,189.67.
To examine the tradeoff with reallocation of LIHEAP funds to weatherization, we have
performed some basic calculations for the purpose of comparison to our weatherization scenm'io.
Over half of LIHEAP spending is for heating and cooling benefits to assist households in paying
their energy costs. The vast majority of these benefits are for heating rather than cooling.
Heating costs amount to roughly 39% of total home energy costs, and LIHEAP benefits offset
about 52% of recipient heating COSTS.3 Using the 1987 base year Black household total energy
expenditure level of $1,139.87, LIHEAP heating assistance over the 12-year time period would
amount to $3,236.24. As with the weatherization case presented above, this assumes no energy
price increase and no change in the household fuel mix.
CONCLUSIONS AND DIRECTION OF' FUTURE WORK
This analysis offers the following conclusions:
3Low-Income Home Energy Assistance: A Program Overvie._w United States GeneralAccounting Office, Washington, D.C., 1990.
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1. Low-income Black and Majority households do not appear to experience the "takeback"
effect and therefore will likely realize the full extent of the expected energy savings due to
weatherization. Therefore, we would expect federal programs designed to lower energy
consumption and expenditures of low-income households to achieve these goals.
2. Over the 12-year time period discussed, LIHEAP payments would provide $3,236.24 in
benefits, or roughly 20% of total household energy costs for a Black household. This type
of benefit is not expected to yield reduced energy consumption; in fact, economic theory
would predict that the household may consume more than it would otherwise, as it is not
bearing the full costs of consumption.
3. Our weatherization case benefits the Black and Majority households by reducing energy
consumption and expenditures by 56% over a 12-year period. A further benefit is the
reduced energy use of the same magnitude.
Future work should first extend our MEAM analysis to include Census region data,
Hispanics, Native Americans, and Asians. In addition, a sensitivity analysis using varying ESR's
should be conducted. MEAM could 'also be applied to analyze the impact of LIHEAP-type
payment for a portion of space heating costs on energy consumption and expenditures.
The next stage of analysis should include an examination of changes in energy consumption
and expenditures using state or utility level data for minority and non-minority households
receiving WAP, LIHEAP, or some combination of the two programs. The smaller geographic
unit of analysis wil! allow for the effects of climate, fuel prices, and fuel mix. Results of such
i
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an analysis would be valuable in assessing present federal weatherization initiatives and the
reallocation of LIHEAP funds to weatherization activities.
DISCLAIMER
This report was prepared as an account of work sponsored by an agency of the United States
Government. Neither the United States Government nor any agency thereof, nor any of their
employees, makes any warranty, express or implied, or assumes any legal liability or responsi-
bility for the accuracy, completeness, or usefulness of any information., apparatus, product, or
process di_losed, or represents that its use would not infringe privately owned rights. Refer-
en_ herein to any specific commercial product, process, or service by trade name, trademark,
manufacturer, or otherwise does not necessarily constitute or imply its endorsement, recom-
mendation, or favoring by the United States Government or any agency thereof. The views
and opinions of authors expressed herein do not necessarily state or reflect those of the
United Stat¢_s Government or any agency thereof.
,D
REFERENCES
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