Building decarbonization needs an equity lens

In the United States, homes and commercial buildings are responsible for around 31% of greenhouse gas emissions. Since the Inflation Reduction Act passed in 2022, state and federal policies have aimed to aggressively electrify the sector, but many current solutions don’t reach a key segment of the population: low- to moderate-income, or LMI, households. 

According to a report by the American Council for an Energy-Efficient Economy, we would save up to $2 trillion between now and 2025 if we decarbonize buildings equitably. The report finds that energy savings, social benefits, and avoided health costs of moving away from fossil fuels significantly outweigh the costs. 

The human benefits of equitable home electrification are even greater, especially in low-income communities that experience the highest levels of pollution and climate impacts. 

Lyla Fadali, a senior researcher at ACEEE, highlighted the urgency of expanding access: "If we don't invest in energy upgrades in lower-income homes, we risk both higher energy costs and real impacts on human lives from air pollution and climate change, like having a family member hospitalized or a home being flooded." 

The IRA, which provided historical funding for both home and commercial electrification, and the Justice40 Initiative, which stipulates that at least 40% of benefits from federal climate investments reach disadvantaged communities, are two bright spots in federal policy on the issue. There's also more advanced, efficient technology on the market for home electrification. But despite funds and technology being more accessible than ever, many LMI communities report difficulty finding incentives, navigating permits, and choosing contractors. 

To address these barriers, the California Public Utilities Commission assembled an implementation team to run various TECH Clean California programs. VEIC was selected to administer Quick-Start Grants (QSG). These grants fund pilots that test innovative approaches to overcoming barriers to heat pump adoption. The hope is that these pilots will inform the statewide solutions that energy providers and program administrators eventually adopt as they work towards Gov. Gavin Newsom's goal of installing 6 million heat pumps by 2030.

One QSG was awarded to The Energy Coalition, a group that supports income-constrained households with whole-home electrification. The QSG was one of many funding sources used to offer homeowners free solar power, battery storage, and efficient appliances. The group anticipated challenges in navigating the layered programs, so they designed a robust community engagement process. But the bigger hurdle turned out to be getting people interested in the services to begin with. This raised an often-overlooked barrier: trust. 

Even when programs are free, members of LMI communities hesitate to engage with them. Reflecting on the project, The Energy Coalition team noted that — in the words of activist Adrienne Maree Brown — programs must “move at the speed of trust.” To do so, VEIC recommends that “program implementers must be flexible, patient, introspective, creative, willing to problem solve, and committed to adaptive management.” 

Many LMI communities are understandably wary of free services. This means that program administrators need more outreach, local credibility, and a seamless customer experience to reach them. Funds alone cannot move the market; it is also critical to reorient the structures of energy programs to address why LMI communities struggle to electrify their homes or participate in programs like TECH Clean California.

Another QSG was awarded to Franklin Energy to address similar barriers. Franklin Energy runs a Home Energy Savings program, which provides home energy retrofits at no cost to low-income, single-family households. Many eligible Californians do not take advantage of heat pump incentives because their homes need costly electrical repairs or subfloor resizing first. 

The QSG allowed Franklin Energy to make necessary repairs and complete deep retrofits in homes otherwise unable to utilize incentives. To ensure residents knew about these funds, Franklin Energy provided free home energy assessments to highlight potential electrification opportunities and incentives that could offset the technology’s costs.

The program was a major success. 67% of the installations in moderate-income households needed QSG funding to electrify their homes. The program underscored the importance of having a supportive conduit between customers and programs to clarify opportunities and ease administrative burdens.

We have seen similar challenges and successes outside of California. VEIC runs the D.C. Sustainable Energy Utility (DCSEU) — an energy efficiency program for D.C. residents — on behalf of the district's Department of Energy and Environment. D.C. has adopted some of the country’s most comprehensive clean energy transition policies, including targets for building energy performance. These goals cannot — and should not — be met without electrifying low-income households. 

To address this gap and tackle D.C.'s ambitious goals, the DCSEU designed the Low-Income Decarbonization Pilot, which aimed to reduce the carbon emissions of 10 income-qualified single-family homes. The program layered two decarbonization tactics: replacing gas home systems with electric equipment and incorporating solar PV to power these new appliances.

As a first-of-its kind project, the pilot's results were promising. Participants reported greater home comfort, improved indoor air quality, and more affordable utility bills. The homes electrified have reduced annual greenhouse gas emissions by 31.9 metric tons of carbon dioxide equivalent gases. Equally important, the pilot provides a roadmap for other states and cities to scale equitable building decarbonization programs.

VEIC has spent nearly 40 years helping businesses, organizations, and cities electrify buildings nationwide. And while the available funding and technologies change over the years, the recipe for equitable and effective decarbonization programs remains the same. Program administrators need both healthy funds and a clear path for energy-burdened residents to access them. 

To this end, an experienced team like ours can be an invaluable partner, especially for state energy offices that often don’t have the staffing to deploy a massive level of funding to the communities who need it most. As IRA funding rolls in, strong outreach, community partnerships, and bridges between programs will remain vital. Because programs cannot succeed unless people are just as central as incentives.

This is partner content, brought to you by VEIC. VEIC is a national clean energy nonprofit that delivers high-impact energy solutions focused on equity and innovation. Since 1986, VEIC has been recognized as a leader in decarbonization strategies, working with governments, utilities, foundations, and businesses to reduce GHG emissions and create a sustainable energy system that benefits everyone.