Part 1: What's Wrong With This Picture?

Ask an average American consumer about cutting greenhouse gas emissions and the first thing that comes to mind is likely to be the family car. Everyone knows that tailpipes spew noxious fumes into the air, so all we have to do is switch to fuel-efficient hybrid or electric vehicles, right?

The truth is that buildings have a much larger impact on global warming than cars. According to the Pew Center on Global Climate Change, home energy use alone accounts for 21 percent of the overall U.S. carbon footprint – roughly twice the carbon emissions produced by passenger cars. And given that most of America's 128 million homes were built before the adoption of energy-efficient building codes, retrofitting homes to reduce energy waste should be a top priority in our fight against climate change.

Unfortunately, our nation's current approach to residential energy conservation is seriously off course.

To see why, let's look at a typical middle-class home in Sacramento, Calif. The 2,200-square-foot wood-frame house was built in 1958, with no wall or floor insulation, substandard attic insulation, inadequate exterior sealing and leaky heat ducts. Even with force-air gas heating, the home tends to be drafty and cold in winter, and the family of four who live here spend over $2,100 a year on gas and electric bills, producing about 8.6 tons of carbon annually from household energy consumption.

This is a fairly typical energy profile for an older home in the San Francisco Bay Area, but there's plenty of room for improvement – both in terms of energy consumption and household comfort. What are the options?

If this family were to install a 3.5-kilowatt solar electric system priced at $23,380 (before deductions for state and federal rebates), they could save 40 percent on their combined gas and electric bills and reduce their annual household carbon output by 2.8 tons. That's a definite improvement, but adding solar power would do nothing to curb energy waste or make the house warmer in winter.

Now, let's compare the photovoltaic installation with a more affordable energy efficiency retrofit. With a pre-rebate investment of only $10,800 in low-tech efficiency measures – better insulation, duct sealing, low-consumption lighting and a new Energy Star refrigerator – the family could save just as much on their monthly energy bills, improve the health and comfort of their home, and divert about 25 percent more carbon from the atmosphere (3.5 tons) for less than half the cost of rooftop solar panels.

Either way, the homeowners would save about $825 per year on their energy bills. Without factoring in available rebates and incentives, it would take about 28 years for the cumulative savings to offset the cost of the photovoltaic system, while the efficiency retrofit would pay for itself in less than half the time – only 13 years.

Now let's look at the numbers again taking into account the tax credits and other government incentives the family would receive for upgrading their home. This is where current energy policy throws a wicked curveball into the mix.

The photovoltaic system would net a total of $12,439 in government incentives, reducing the homeowners' upfront investment from $23,380 to $10,941. For the more cost-effective efficiency retrofit, they would receive only $624 in incentives, so their out-of-pocket expenses would total $10,176 – only $765 less than the solar panels.

Crunch the numbers to calculate actual performance – measured in tons of carbon abated over the lifespan of these measures – and the results are shocking. We find that the current incentives available to our Sacramento homeowners value a ton of carbon abated through efficiency measures at less than $9, while the same ton of carbon abated by solar generation is worth a whopping $225 of public funding.

Clearly there's something wrong with this picture. If carbon abatement from efficiency retrofits is more effective and more affordable, why should we place such an artificially high value – 25 times higher, in fact – on carbon abatement from solar power generation? Wouldn't it make more sense to reward consumers for reducing wasteful fossil fuel consumption even as we make long-term investments in renewable energy?

The answer, of course, has everything to do with politics, business interests and public perception – and it is only by addressing these three factors that we can level the playing field for residential carbon reduction and achieve our national clean-energy goals.

In the course of this eight-part series, I will show how proven building science methods that are ready for deployment now can achieve a 25 percent reduction in America's residential energy use by 2030, and how a performance-based, market-driven approach to home energy retrofitting will facilitate rapid deployment of these methods nationwide. The bottom line: Retrofitting our older housing stock will reduce energy bills for consumers, ease our dependence on foreign oil, and help us build a sustainable 21st century economy based on clean energy and good jobs for American workers.

To Be Continued in Part 2: It's the Meter That Matters.

Matt Golden is President, Founder and Chief Building Scientist of Sustainable Spaces

Image via Flickr/Creative Commons.