Save Energy – and Money – By Avoiding Rebate and Incentive Programs

If your objective is to reduce your use and waste of energy in the operation of your home – and to reduce the costs associated with it … you will have a better chance of success when you avoid being led by “rebates” and other incentives provided by government agencies and utility companies.

How can passing on the cheap or “free” audit … or ignoring the rebate for the water heater or furnace … save you money?  Read on, and  be surprised.

Economic Stimulus versus Reducing Energy Use and Costs

First, let me introduce you to the American Recovery and Reinvestment Act.

This is an act passed by the U. S. Congress and signed into law by the President that set aside billions of dollars to be spent for the purpose of putting more money into the economy and creating jobs.

Money sent to the states, utility companies and other private entities under this Act of Congress has that … stimulating the economy and creating jobs … as its only purpose.

Some of the money under this act was provided to a particular government contractor for the purpose of creating energy efficiency computer calculators designed for the use of home owners (such as yourself) and energy professionals (such as me) to use to calculate present levels of energy use and to recommend improvements.

In almost every case, these calculators will produce a report that will recommend that home owners spend additional money, such as to exchange presently owned appliances for newer “EnergyStar” rated models, which puts hundreds of their dollars into the economy and creates jobs to produce and ship these new appliances and materials.

These models do not require an  actual  measurement of air leakage … representing the amount of heated and cooled air in the home that is being wasted to the outdoors … which can reduce the heating and cooling costs by up to 40% with the use of inexpensive caulk or foam.

Instead, the calculators and their reports will simply refer to an undefined act of “plugging air leaks” and provide a default savings projection which, in the absence of a diagnostic check by a qualified energy official, could actually create dangerous or unhealthy conditions (refer to link under “air leakage” in the preceding paragraph).

These calculators produce reports that will also suggest spending additional money to add insulation which, in the presence of air leaks that have not been addressed first, will not only reduce the effectiveness of the added insulation but will also result in the probable need to spend even more money when the air leakage is eventually addressed and the new insulation is damaged in the process.

The Home Energy Score

Soon, you will be hearing of a new U.S. Department of Energy program called the “Home Energy Score“.

This program will appear to be an inexpensive energy survey where home owners will pay someone up to $100 to come into their  home and collect information for a computer model — designed by that government contractor who was paid with money from the same American Recovery and Reinvestment Act — to simply give the house a “score” (from 1 to 10) and a brief report to tell the owner what to spend money on in order to increase his “score”.

If your home’s “score” is more important to you than its level of comfort, indoor air quality and energy efficiency it might be worth the $100 to know what that score is, but the advice that comes with the score – directing you how to stimulate the economy and create more jobs by telling you what to buy – is already available to you for free through on-line sources.

Utility Company Rebates

Utility companies are also playing their part by paying rebates for various purchases that their customers are encouraged to make.

Chances are, your electric company is  offering you a rebate to replace your gas water heater with something that uses their electricity while – at the same time – your gas company could be providing a similar rebate to throw away the electric water heater and replace it with one that runs on their gas.  Does this save you energy … or does it simply encourage you to spend more of your money to stimulate the economy and create more jobs?

Does your utility company provide you any significant rebates for sealing up the air leaks that keep your heated air in the house longer or do they, as many do, place their emphasis and largest rebates toward the purchase of bigger and “more efficient” furnaces and air conditioners?

How many times are customers actually choosing the less efficient system by incorrectly assuming that the rebate is directing them to the smarter choice?

The St. Louis Post-Dispatch, in an article last year, considered a utility company asking its customers to use less energy as being similar to the Anhueser-Busch Brewery  asking its customers to drink less beer.

And, in consideration of all of the recent increases in their rates for their customers, let’s not even ask where those rebate dollars actually come from.

Let’s ask this, instead … If the gas and oil service providers stopped using rebates to encourage people to get rid of their electrical equipment – and the electric service providers stopped using rebates to encourage people to get rid of their gas and oil using equipment – might they both require less of a fee increase next year?

The bottom line is this:  Upgrading your older model appliance with the recommendations of your certified energy auditor is going to save you much more money than the rebate, anyway.  After first making the educated choice … if your choice should still qualify you for the rebate anyway, that’s icing on the cake.  Not the cake.

The Solution = Independent and Unbiased Advice

Saving energy and reducing the associated costs is not always about spending more money, although some expenditures are sometimes necessary.  While it is wise and prudent to replace broken and improperly functioning mechanical equipment with newer and more efficient models, energy efficiency can be improved through a variety of steps that do not require major purchases, initially.

Seek the assistance of an independent home energy professional for a complete, accurate and unbiased description of your home’s performance and recommendations for improvements.  Seek, first, the steps that are best in achieving your energy efficiency goals and then … after selecting the right materials and establishing a scope of work … see what rebates or incentives might be there to assist you.

Remember, it is not the “rebate” or discount that you are seeking … it is the results that will produce a more comfortable, healthier and energy efficient home to live in with the greatest return on any financial investments that you make toward that end.  Take the money that you stop wasting on unnecessary energy loss … and stimulate the economy by spending it on something you enjoy.

11 responses

  1. Lol. Staying away from programs sounds like the advice Dr. Energy Saver gives his franchisees.

    Good post James

  2. Good advise Jim, chose a professional energy auditor to determine exactly where and how to save money. Jim Bushart is my choice in Missouri, you won’t receive worthless information, just the facts.

    • Thank you, Dale … and likewise, for the good folks in Arizona who are looking for a skilled thermographer who can provide advanced thermal imaging for residential and commercial buildings, Dale is your man. I’ve known and trusted him for years.

  3. There’s a disconnect in this argument – there are ARRA programs that require whole house diagnostics performed by trained and certified professionals. Not all incentive programs are the same (exclamation point, maybe an expletive as well). It might be more useful to highlight and support the programs that advocate best practices in home performance – like those that are improving on currently available data collection software, loan options, community outreach and marketing approaches (all based on educated building science principles and sophisticated media). The incentives attached to whole house incentive programs have there ‘issues’ but overall these types of incentives direct homeowners to HP contractors’ doors – and advocate strongly for ‘the educated consumer.’

    • Indeed, Heather, not all incentive programs are “bad” but all have a potential to mislead if a consumer is guided strictly by an incentive program, with all of its limitations, asterisks and agenda.

      Even though the gas company might have a “rebate” to cover it, replacing an electric heat pump with a gas furnace is not always the best choice.

      It is an insult to the intelligence of many consumers to have someone pay them to do something that will really benefit them. If I were hungry and went into a diner where the waitress offered to PAY ME to eat a steak … my first thought would be to find another diner.

      I agree with you that “not all incentive programs are the same” and that the “educated consumer” is best protected from poor choices.

      By avoiding these incentive programs at the beginning of that education process until the “educated consumer” has the information and opportunity to select from ALL of their available options to improve the comfort and efficiency of their home, they are more likely to make the right choices … as opposed to simply choosing the option with the biggest “rebate”, as one example of a bad choice.

      The “educated consumer” should make the choice that will best improve the comfort and efficiency of their home, and most likely to lower their expenses … and after making that choice … explore the possibility of “incentive programs” to help them pay for it.

      They should not select the “incentive program” and limit themselves to the choices associated with it, IMO. Particularly since many of these “incentive programs” are designed for purposes and agendas that may not be directly related to the unique needs of that consumer.

      I think you can agree with me on these points, right?

  4. their, not there.
    PS. I worked on utility DSM programs for a giant utility and agree on the illogic of running EE programs through IOUs – as not all utilities are funded and managed the same. (see Fort Collins municipal utility, or Boulder’s municipalization effort – in contrast to TriState- backed utilities, or the IOU there.). There, not their. Gotta go to work, now …

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  6. Strategically utilizing incentives is only common sense. The REAL answers to building a thriving ecolific can be found by Googling “The FutureSource Initiative.”

    Literally all energy consumed by buildings in the future will be created BY the buildings themselves. It’s the Abide Systems ethos that minimal energy consuming buildings (using high-efficiency “diaphragm” technologies) accompanied by an appropriately sized energy-harnessing platform results in a positive energy building that will free you from dependency on public utilities.

    The caveat to consider is that you will be taxed on all the excess energy you generate and supply to the grid. How our governments have partnered with big energy may determine whether or not this tax will be complementary or onerous… it’s still too early to tell.

    My bet would be on “onerous.” That’s because I choose to believe in the conspiratorial rather than circumstantial perspective of human development – especially regarding political affairs.

    One thing is certain. At some point in the not too distant future all incentives will cease, and you WILL be taxed on the increased asset value of your property.

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