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February 17, 2023
In Knoxville, Tennessee, a small nonprofit called the Socially Equal Energy Efficient Development, or SEEED, has recently finished building something big: a new solar home. In addition to 12 rooftop solar panels, the home has plenty of energy efficiency measures: foam-padded concrete walls for improved insulation, foam in the rafters to help seal up cracks, and smart home technology like motion-detector lights and programmable thermostats.
SEEED did not build this special home for just anyone. They built it for a low-income family to buy at below market value. “We want to help provide a pathway to generational wealth,” JD Jackson, the chief operating officer at SEEED, said.
The Kyle family. Credit: SEEED
Moving in this spring is the Kyle family: Sheonna, Melvin, and their three kids. “They have never owned a home before,” Jackson explained. “They are so excited to move in.”
These energy efficiency measures will help the Kyle family live comfortably in their new home. But that is a joy that many people across the country have not experienced. Energy efficiency remains a woefully underused solution, despite being one of the easiest, most cost-effective strategies to help combat climate change, reduce energy bills, and improve home comfort. This is especially true for low-income households, 67 percent of which pay more than six percent of their income on their energy bills. Households that are primarily Black, Indigenous, and People of Color are also more likely to experience high energy burdens than white households, even when accounting for differences in income.
And while energy efficiency can be put to use anywhere, it will have some of the biggest benefits for people living in the Southeast United States. For people in Tennessee, who spend on average eight percent more on their electric bills than the rest of the country, energy efficiency upgrades like better insulation and smart thermostats could mean that people do not have to choose between keeping the lights on and putting food on the table.
“Bills that are this high are the consequences of historic under-investment in energy efficiency in the Southeast,” Forest Bradley-Wright, the energy efficiency director at Southern Alliance for Clean Energy, explained. “We have an enormous amount of energy efficiency potential just waiting to be tapped.”
Tapping into that potential will involve everyone, from federal agencies, the Tennessee Valley Authority (the federal public power utility that serves almost all of Tennessee), regional and local nonprofits, and community groups to ensure that the millions of available federal dollars for energy efficiency can be directed to the people who need it most.
Energy burden is defined as the percentage of annual household income spent on energy bills. A high energy burden is a household that pays more than six percent of its annual income on energy bills. Households with severe energy burdens pay more than ten percent.
What is important to know about energy burdens is that the price of energy is just one of many factors that determine the level of burden. In fact, electricity is sold at some of the cheapest rates in the Southeast, yet residents still have some of the highest energy bills, and therefore higher energy burdens, in the country.
Another factor that affects the level of energy burden is the quality of housing stock. “Around 57 percent of the buildings in our region were built before the nation’s first energy codes,” Maggie Kelley Riggins, a senior program manager at the Southeast Energy Efficiency Alliance, said. “A lot of our building stock was not built to a standard that had energy efficiency in mind.”
Click on the arrows in the top left corner to turn on and off the different layers and see the map legends. Data provided by the Department of Energy LEAD Tool
Looking at the map, the counties without Tennessee’s largest cities have the highest average county-level energy burdens in Tennessee, there are similar challenges with the manufactured housing stock. Manufactured homes, which are mobile homes built in factories and then moved to a semi-permanent location, are common affordable housing options for rural residents. Yet, Kelley Riggins pointed out, their energy standards were updated last year for the first time since 1994 and will take effect in May.
Income is another huge piece of the energy-burden puzzle. “Before the pandemic, about 40 percent of our region was at or below the federal poverty line,” Kelley Riggins explained. “So in addition to higher bills with the older housing stock, we also have many Southerners with lower incomes compared to a lot of the rest of the country.”
Zooming into Tennessee cities highlights the enormous toll of energy burdens—and the history of racial and economic discrimination that underlies them. An American Council for an Energy Efficient-Economy report based on 2011 and 2013 data found that a quarter of low-income households in Memphis pay more than 25 percent of their annual income on their energy bills, far above the national average energy burden of 3.5 percent.
In addition, Black people have the highest energy burdens in the city. This is part of the legacy of redlining, which was a racist government practice beginning in the 1930s that evaluated the riskiness of neighborhoods for mortgage lenders and marked minority neighborhoods in red—declaring that they were too “high risk” to receive loans. Many of the redlined areas in Memphis remain primarily low-income people of color today. There also continues to be a significant disparity in home ownership: 72 percent of white people in Memphis own their homes, as compared to only 42 percent of Black people. And when you do not own your home, it can be even harder to get energy efficiency upgrades, as the landlord often does not pay the energy bills and renters are unable to make changes without the landlord’s permission.
All of these problems are exacerbated by widespread under-investment in energy efficiency. One of Tennessee’s only state-wide programs is Home Uplift, run by the federally-overseen Tennessee Valley Authority (TVA), the largest public power utility in the United States. Despite their size, the utility invests relatively little into energy efficiency as a proportion of their revenue, Bradley-Wright explained, and their work in this space is at a “scale so inadequate compared to the need.”
In fact, the utility appears to be heading in the wrong direction on energy efficiency. Bradley-Wright found while researching for the fifth Energy Efficiency in the Southeast report, which will be published later this year, that TVA reinvested only 0.01 percent of its annual retail savings into energy efficiency projects in 2021. It is tied for worst performance by a major utility in the Southeast, placing it among the worst in the country: Bradley-Wright reports that the national average for utility energy efficiency investment is 0.68 percent.
But implementing more energy efficiency measures would help TVA as well as its customers. When winter storm Elliott tore through the country in December 2022, TVA customers experienced rolling blackouts as energy demand peaked at the same time that some power plants failed. Having more energy-efficient homes would lower the demand on the electric grid and help balance power flows even during extreme weather events.
The recent influx of money for energy efficiency upgrades from the Infrastructure Investment and Jobs Act (P.L.117-58) and the Inflation Reduction Act (P.L.117-18) means that it is the perfect time to accelerate this work across the country.
One of the main ways that federal money goes to state energy efficiency projects is through the Weatherization Assistance Program. The Infrastructure Investment and Jobs Act is boosting this program with a one-time infusion of $3.5 billion. Tennessee will be receiving approximately $66 million of those funds, which could go to help thousands of low-income people in the state. According to Bradley-Wright, the Tennessee Housing Development Authority (the state agency responsible for distributing this investment) aims to deliver a significant portion to multi-family affordable housing upgrades.
The Inflation Reduction Act is also chock full of money for energy efficiency that will start to roll out in the next few years. This includes increasing and extending the Energy Efficient Home Improvement Credit, which provides tax credits for home efficiency upgrades like heat pumps. The law also created a new rebate program that provides $4.3 billion to state energy offices for energy efficiency retrofits. And the U.S. Department of Housing and Urban Development is getting $1 billion to improve the efficiency of affordable housing.
The federal money is out there for energy efficiency—Tennessee just needs to jump onboard, Bradley-Wright said. “These funds are going to go to the states that step forward.”
Figuring out how to scale up energy efficiency work across the country, with the help of federal dollars, will be a long-term endeavor, as every community is different. There is still an incredible amount of work to be done as federal agencies develop guidelines for how to deliver this money and states and organizations work on applying for and distributing those funds.
“The biggest piece is trying to understand what equitable outcomes look like at a local level,” Kelley Riggins explained. “If we’re trying to close the gaps that exist around equity and energy efficiency in the Southeast, we have to truly understand what people are experiencing, and make sure that we are creating programs that intentionally reach these folks.”
SEEED career readiness participants work on the solar home’s landscaping. Credit: SEEED
One of the biggest gaps that Kelley Riggins noted was the lack of workforce—the people to actually install the energy efficiency upgrades. Nationwide, there is a shortage of electricians and contractors who are equipped to do this work, especially as the demand for electrification is expected to increase. There is $200 million in the Inflation Reduction Act to train contractors in energy efficiency and electrification upgrades, which can help lift up communities in the Southeast in more ways than one.
SEEED has been thinking along similar lines. When the organization first started in 2009, the four founders—all Black men from East Knoxville, a primarily lower-income Black neighborhood—asked community members what issues they needed help with. There were two big ones that rose to the surface: youth violence and high utility bills. Those conversations helped form SEEED’s core mission of providing access to training for young adults in community engagement and environmental education.
The rest of the state has the opportunity, with the help of federal dollars and increased utility investment, to follow the example that SEEED has set. Energy efficiency measures, combined with renewable energy and workforce development, have the potential to bring wide-reaching, life-changing benefits to Black and low-income communities in Tennessee.
Author: Emma Johnson
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