Participation of the elderly in residential conservation programmes

Participation of the elderly in residential conservation programmes Linda G. Berry and Marilyn A. Brown

Although greater-than-average opport u n i t i e s for r e s i d e n t i a l e n e r g y efficiency improvements exist among the elderly, most conservation programmes are not successful in reaching this subgroup. This paper reviews evidence on elderly participation in utility, federal and state programmes. Even though most of these programmes fail to attract elderly participants there are exceptions. The features and marketing strategies of successful programmes designed to reach the elderly include door-to-door canvassing with free installation of measures, recruitment and verification of eligibility through existing community groups, peer services and c o u n s e l l i n g by other senior citizens, shared savings programmes offered in retirement villages, and rebate programmes that offer highly visible measures with short paybacks. Although there are a few successful programmes, as a whole, coverage of the elderly by utility, federal and state programmes is limited and a large majority of the elderly receive no assistance. Keywords: Elderly; Conservation; Participation Linda Berry and Marilyn Brown are with Oak Ridge National Laboratory, Building 4500N, MS 206, PO Box X, Oak Ridge, TN 37831-6207. Oak Ridge National Laboratory is operated by the Martin Marietta Energy Systems Inc under contract No DE-AC05-84OR21400 with the US Department of Energy. Support for this paper was provided by the Office of State and Local Assistance Programmes of the US Department of Energy. The helpful comments of Eric Hirst continued on p 153

152

Overall, the elderly use residential energy more inefficiently than the non-elderly population, j As a result, significant opportunities for energy efficiency improvements exist among older age groups. In general, however, conservation programmes have not been successful in reaching older customers. Residential Conservation Service (RCS) audit programmes, for example, attract little participation from the elderly. Most utility-sponsored post-audit loan and rebate programmes also have low levels of elderly participation. In addition, most federal, state and utility-sponsored programmes offer weatherization services only to those among the elderly whose incomes are below federally defined poverty levels. Since a majority of the elderly do not meet such income eligibility requirements, most are not eligible for such assistance. This paper begins by describing the importance of the elderly as a market segment for conservation programmes. The distinctiveness of the elderly in factors related to energy demand, the growing size of this age group, and the inefficiency of their energy use all suggest that more attention to their needs is warranted. The typically low participation rates of the elderly in utility-sponsored conservation programmes, which are discussed in the next section of the paper, also suggest the need for marketing strategies specifically designed to reach this group. The features of several programmes designed to attract the elderly are described in the third major section of the paper. Federal and state programmes for the elderly are reviewed in the next section. The final section summarizes the marketing approaches that have attracted the elderly and makes policy recommendations.

Importance of the elderly as a market segment for residential conservation programmes Success in marketing a product or service often depends upon identification of appropriate market segments and use of promotional activities tailored to the unique needs and requirements of these segments. To be most successful, the segments chosen should have the following characteristics: first they should be distinct in terms of 0301-4215/88/020152-12503.00 O 1988 Butterworth & Co (Publishers) Ltd

Conservation programmes]br elderly differences related to market demand - that is, the segments should exhibit homogeneity within and heterogeneity between groups: and second the segments should be large enough to be worth the effort of differentiating the market. 2 In the following sections we assess the extent to which the elderly meet these criteria. Subsegments of the elderly population are also considered.

Distinct market demand The elderly are distinct in many ways which relate to demand for residential conservation measures and programmes. The housing of elderly Americans is generally older and less adequate than the balance of the nation's housing. About 40% of homes owned by older persons in 1980 were built prior to 1940 (22% for younger owners), and 9% were classified as inadequate in 1981 (compared with 6% for younger owners). 3 Homes occupied by older households have less insulation, fewer storm windows, and older heating and cooling equipment, indicating a g r e a t e r than average need for energy efficiency improvements.4, 5, ~ The elderly also engage in fewer conservation behaviours.7, s At the same time, they require higher temperatures for comfort and health. 9 The 'effort' barrier to conservation is particularly significant for the continued from p 152 (ORNL), Mary Fowler and Harry Lane elderly - both because of their diminished physical ability and their lack (DOE) are appreciated. of energy know-how. The elderly have fewer years of formal education ~M.A. Brown and P.A. Rollinson, 'The than younger age cohorts and are less aware of effective energy-saving residential energy consumption of low- actions. "~" ~ income and elderly households: how 'nonAnother barrier to investments in conservation technologies is the discretionary' is it?' Energy Systems and savings mentality of older persons. Although the elderly are frugal, they Policy, Vol 9, No 3, 1985, pp 271-301. 2R.B. Hutton and D.L. McNeill, 'Energy do not relate well to conservation's 'spend-now-to-save-later' conservation and vulnerable groups: iden- philosophy.~2. 13 They are also uncertain about financial solvency and tifying market strategies for home energy audits,' in B.M. Morrison and W. Kempton, the length of time they will be able to live independently, which eds, Families and Energy: Coping with contributes to a shorter than average planning horizon for the Uncertainty, Michigan State University, amortization of investments, t4 Thus, the potential demand for energy 1984. 3American Association of Retired Persons, efficiency measures on the part of the elderly households is great, but so Profile of Older Americans: 1984, are the barriers to implementation. Washington, DC, 1984. 4R. Smiley, 'The levels and determinants of household insulation activity', Energy, Vol 4, 1979, pp 1087-1098. 5E.L. Jackson, 'Perceptions of energy problems and the adoption of conservation practices in Edmonton and Calgary', Canadian Geographer, No 24, 1980, pp 114-130. 6Brown and Rollinson, op cit, Ref 1.

71bid. 8Hutton and McNeill, op cit, Ref 2. 9Minnesota Department of Energy and Economic Development, Energy Informa-

tion for the Older Population: A Market Research Report, St Paul, MN, 1983. ~°Brown and Rollinson, op cit, Ref 1. 11Jackson, op cit, Ref 9. ~2Brown and Rollinson, op cit, Ref 1. ~30p cit, Ref 9. 141bid" 150p cit, Ref 3. ~6Energy Information Administration, Office of Energy Markets and End Use, Energy Use Division, Residential Energy Consumption Survey, unpublished data, 1982.

ENERGY POLICY April 1988

Significance of the elderly segment In terms of sheer size, the older population is significant and will become even more so. The elderly (ie those 65 years of age and older) numbered 27.4 million in 1983 at which time they represented 11.7% of the US population. By the year 2000 they will represent 13.0% of the population, and by 2030 this percentage is projected to increase to 21.2%. t5 Because the elderly tend to have fewer members in each household, they form a greater proportion (20.8%) of the total households in the USA. These households consume about 21% of the total residential energy used annually. They consume less than 20% of the residential electricity, however, because fewer heat with electricity, and those with electric heat consume fewer kWh/household.~6 The fact that three-fourths of the elderly are homeowners means that most of this group has considerable control over its in-home energy use and therefore can potentially change it. In addition, because elderly households spend a higher proportion of their income on residential energy than the average household (8.1% v 5,3%), they have at least one factor motivating them to improve their household energy efficiency.

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Conservation programmes for elderly Table 1. Age distributions of participants in Bonneville Power Administration's Interim Weatherization Programme v all residential customers. Head of household's age

Programme participants (%)

All residential customers (%)

Under 18 19-29 30-39 40-49 50-59 Over 60

1.3 9.1 38.8 15.4 12.2 23.2

0.5 18.7 20.7 15.6 13.7 30.8

Although the elderly consume less total energy/household than the non-elderly, measures of inefficiency in energy usage such as energy consumption per capita and per square foot of occupied space show that the elderly have greater than average potential for energy efficiency improvements. ¿7. is As noted earlier, this greater potential occurs because homes occupied by older households have fewer conservation measures in place and because the elderly engage in fewer conservation behaviours.

Further segmentation of the elderly population is necessary

Source: Oak Ridge National Laboratory's data base on BPA's Interim Weatherization Programme and Pacific Northwest Residential Survey, 1983. Table 2. Age distributions of participants in Pacific Gas Electric's Zero Interest Loan Programme (ZIP) v all eligible households. Head of household's age

ZIP participants (%)

All eligible customers (%)

Under 35 35-54 Over 54

21 52 27

18 45 37

Source: Richard S. Barnes, see Ref 23.

The market demand of the elderly for improved residential energy efficiency is both distinct and significant enough to merit the development of specialized programmes by utilities, states and others. There is a tradeoff in market segmentation efforts, however, between large segments where potential impacts justify the development of custommade marketing strategies, and small segments which may be easier to reach because of their homogeneity but which have less significant potential impacts. One of the key outcomes of a 1986 Symposium on Energy and the Aging sponsored by the US Departments of Energy and Health and Human Services was the conclusion that the elderly are a heterogeneous group and that its essence can only be captured by further differentiation. Some of the potentially important subgroups of the elderly include: •

Table 3. Age distribution of participants in Florida Power and Light's Home Energy Survey v all residential customers. Head of household's age

Home energy participants (%)

All residential customers (%)

Under 21 21-50 51-60 Over 60

0.5 52.0 19.1 28.4

0.3 39.1 15.9 44.7

•

Source: M.A. Brown, L.G. Berry, D.L. White and P. Zeidler, see Ref 24.

•

•

17Brown and Rollinson, op cit, Ref 1. 18G.K. Warriner, 'Electricity consumption by the elderly: policy implications', Journal of Consumer Research, No 8, 1981, pp 258-264. 19R.L. Clark and E.W. Erickson, 'Energy and aging: home heating and cooling',

Proceedings of a Symposium on Energy Costs and the Elderly: The Next Twenty Years, US Department of Health and Human Services, Washington, September 1985, pp 37-60. 2°Op cit, Ref 9.

154

DC,

Low-income elderly. Approximately 12.4% of all persons 65 years of age or older have incomes below the poverty level (compared with the 14.4% national average in 1984). Because the elderly poor typically live on fixed incomes, their financial barriers to investments in retrofit activities are greater than those of many other poor households. At the same time, their need for such investments is great because low-income seniors spend a higher percentage of their total expenditures on energy than do other elderly households.W Younger senior citizens. One market research study found that the younger seniors (ages 60-70) are more aware of conservation and more receptive to conservation messages - suggesting that they would be a more fruitful segment than older seniors. 2° Women living alone or with non-relatives. This segment represents 41% of older women, who themselves are a majority of the elderly. These women are forced to deal with problems that were traditionally handled by men, including major home repairs such as the installation of insulation. Older renters. A disproportionate number of the elderly who rent live in publicly owned or subsidized housing - 22% versus 9% of younger renters. To achieve major improvements in the energy efficiencies of this group, conservation programmes must work with public housing authorities.

As we shall document, utility, state and federal conservation programmes have been designed to meet the unique needs of low-income-elderly households, but few of the other subsegments mentioned above have been specifically targeted.

Elderly participation in conservation programmes Even though the homes of the elderly have a greater than average

ENERGY POLICY April 1988

Conservation programmes jor elderly

21C. Frey and D. LaBay, 'A comparative study of energy consumption and conservation across family life cycles', in R.P. Bagozzi and A. Tybout, eds, Advances in Consumer Research, Association for Consumer Research, Ann Arbor, MI, 1983, pp 641-646. 225. Hirst and R. Goeltz, 'Residential energy conservation actions: analysis of disaggregate data', Energy Systems and Policy, No 6, 1982, pp 135-150. 2aR.S. Barnes, 'Who are Pacific Gas and Electric's ZIP participants? current findings from an evaluation of PG&E Company's residential zero interest loan program', in C.B. Smith, T. Davis and P.W. Turnbull, eds, Meeting Energy Challenges: Proceedings of the Second Great PG&E Energy Expo, Vol II, Oakland, CA, 21-23 May 1985. 24M.A. Brown, L.G. Berry, D.L. White and P. Zeidler, The Role of Auditor Sales Effectiveness in Residential Conservation Incentive Programs: A Case Study at Florida Power and Light, ORNL/CON-201, Oak Ridge National Laboratory, Oak Ridge, TN, 1986. 25M.A. Brown and G. Reeves, The Implementation of a Residential Energy Conservation Shared Savings Program: The General Public Utilities Experience, ORNL/ CON-187, Oak Ridge National Laboratory, Oak Ridge, TN, 1985. 26R.M. Wirtshafter, 'Non-participants in utility conservation programmes', Energy Policy, Vol 13, No 2, April 1985, pp 143-156. 2~Barnes, op cit, Ref 23. 28M,J. Doane and R.S. Hartman, Measuring the Impact of Residential Conservation, Volume 3: An Econometric Analysis of General Public Utilities Data, prepared by Arthur D. Little Inc for the Electric Power Research Institute, Palo Alto, CA, 1984. 29R,S. Hartman and M.J. Doane, Measuring the Impact of Residential Conservation, Volume 2: An Econometric Analysis of Portland General Electric Company Data, prepared by Arthur D. Little Inc for the Electric Power Research Institute, Palo Alto, CA, 1984. a°E. Hirst, B. Bronfman, R. Goeltz, J. Trimble and D. Lerman, Evaluation of the BPA Residential Weatherization Pilot Program, ORNUCON-124, Oak Ridge National Laboratory, Oak Ridge, TN, 1983. alB. Tonn and L. Berry, 'Determinants of participation in home energy audit/loan programs: discrete choice model results', Energy, No 11, Vol 8, 1986, pp 785-795. 321bid. 3aHartman and Doane, of) cit, Ref 29.

ENERGY

P O L I C Y April 1 9 8 8

potential for energy efficiency improvements, the elderly are less likely to participate in conservation programmes. In general, age has a curvilinear relationship with conservation behaviour, as young and elderly households take fewer actions than those in their middle years.2J, 22 This same curvilinear association can be seen in patterns of participation in conservation programmes (Tables 1, 2, 3, and 4). As Table 1 shows, 23% of the participants in the Bonneville Power Administration's weatherization programme were over age 60, while over 30% of the eligible households were elderly. In the Pacific Gas and Electric (PG&E) programme 27% of the participants and 37% of the eligible were over 54 years of age (Table 2). In the FPL programme 28% of the audit participants and 44% of the eligibles were over age 60 (Table 3). The under-representation of the elderly among conservation programme participants shown in our examples, is typical of programmes in that they have not developed delivery mechanisms specifically designed to reach this group. 2~' The Residential Energy Conservation Action Programme (RECAP), developed by the General Public Utilities Corporation (GPU), has been implemented in five communities in New Jersey and Pennsylvania through two of GPU's electric utility operating companies (Jersey Central Power and Light and Metropolitan Edison). RECAP is a shared savings conservation programme which offers residential customers free weatherization services. All risks of obtaining less than anticipated fuel savings are assumed by energy-savings companies (ESCOs) that are under contract with the utility to install conservation measures. The utility reimburses the ESCOs for the value of the marginal avoided cost for each kWh saved due to the improvements. In the communities served by Metropolitan Edison, RECAP drew disproportionately from middle-aged cohorts, reflecting the typical under-representation of the elderly (Table 4). Jersey Central Power and Light, however, implemented RECAP in several retirement villages which, as will be discussed later, was an effective way to reach the elderly.

Age effects in discrete choice models Although the information on participation levels by age reviewed above shows that the elderly are less likely to participate in conservation programmes, it does not tell us how important age is as compared to related predictors of participation. It may be that the elderly are less likely to participate mainly because of their lower educational levels, or because of the type of housing that they occupy, Discrete choice regression models allow one to account for the correlations between various predictors of participation and to determine which predictors are most important. These models also can be used to predict the probability of participation for various types of households. Several discrete choice models that predict participation in conservation programmes have been developed recently. 27-31 Most of these models use age of household head as a predictor. When age is included in the models, it always has a negative sign and is generally a highly significant predictor of participation. In the model developed by Tonn and Berry, 32 age is a significant predictor of participation even after the effects of income, education, dwelling age, costs of retrofit, and several attitudinal variables are controlled. Discrete choice models developed by Hartman and Doane 33

155

Conservation programmes for elderly Table 4. Age distribution of participants in the Metropolitan Edison Company's RECAP programme v all eligible households. Head of household's age Under 30 31--40 41-60 Over 54

RECAP participants (%) 3.9 32.3 52.0 11.7

All eligible households (%) 12.2 28.1 40.2 29.4

Source: M.A. Brownand G. Reeves, see Ref 25.

for Portland General Electric programmes and by Doane and Hartman 34 for General Public Utilities programmes also found that age of household head had a negative relation to participation. Other variables in the Doane and Hartman models include: occupancy status (owner/renter), education, income, length of residence in the house (in years), and awareness of electric power company advertising (yes/no). Another model that found age to be a significant negative correlate of participation was developed by Barnes 35 with data for the PG&E Company's zero-interest loan programme. In addition to the age variable, Barnes' model included the independent variables of dwelling type, income, type of heating and cooling system, and gas and electricity use variables.

Utility programmes designed to reach the elderly

34Doane and Hartman, op cit, Ref 28. 3SBarnes, op cit, Ref 23. 38Paul Markowitz (survey coordinator),

Survey Results of Regulatory Utility Commissions' Electrical Resource Planning and Conservation Activities, prepared for Congresswoman Claudine Schneider's Office, Washington, DC, 1985. aTL. Berry, M. Hubbard and D. White, A

Review of Financial Incentive Low-Income, Elderly and Multifamily Residential Conservation Programs, ORNL/CON-206, Oak Ridge National Laboratory, Oak Ridge, TN, 1986.

381bid. 39Wirtshafter, op cit, Ref 26.

156

The low levels of elderly participation and the model results reviewed above, show that programmes designed for a general market are unlikely to attract the elderly. Because many utilities recognize that different marketing strategies are needed for the elderiy, a number of programmes have been developed for this target group. To obtain an understanding of the range of programme types used to reach the elderly, we asked experts for their nominations of successful programmes. Researchers known for their work on conservation issues were contacted at Oak Ridge National Laboratory, Lawrence Berkeley Laboratory, the American Council for an Energy-Efficient Economy, the National Research Council and the Alliance to Save Energy, and asked to name successful programmes. Representatives of trade and research associations such as the Electric Power Research Institute, Edison Electric Institute, the American Gas Association, and the American Public Power Association were also asked to list the programmes that they believed were especially successful in reaching the elderly. Representatives of the National Association of Regulatory Utility Commissioners and of the California Energy Commission were asked to give their recommendations too. In addition, a recent survey of State Public Utility Commissions (PUCs) identifies 14 states that require utilities to provide special conservation services for the elderly. 36 To obtain an overview of programmes in these states, we contacted the PUCs with such mandates. After identifying utilities with programmes for the elderly, we contacted utility staff to obtain information about programme history, design and operations. Detailed descriptions of most of these programmes can be found in Berry, Hubbard and White. 37 Most of the programmes we reviewed focus on the needs of the low-income elderly and include efforts to reach the elderly as one component of a programme for the poor. 38 All of the major California utilities and several Pacific Northwest utilities including the Bonneville Power Administration, for example, offer free weatherization to the low-income elderly. Since over 85% of the elderly do not have incomes below federal definitions of poverty, most will not qualify for these programmes. In addition, the record of utilities in the delivery of programmes to low-income households is a case of a few preliminary successes. 39 In other words, most low-income households, regardless of their age, do not receive utility conservation services. The failure to provide services to the elderly with incomes above

ENERGY POLICY April 1988

Conservation pt:ograrnmes for elderly

4°l

All persons

[]

Persons over 65

35

30

Figure 1. Percentage of incomes below poverty level for all persons v

-~

25

~

20

~

15 10

persons over 65 a. aThe source for this figure is: US Bureau of the Census, Statistical Abstract of the US 1985 (106th edition), Washington, DC, 1986.

1959

1970

1979

1983

1984

poverty levels may be due in part to the fact that only in the 1980s have poverty rates among the elderly reached levels comparable to those among the general population (Figure 1). In 1959 and 1970 elderly rates of poverty were nearly double those of the general population. Even though most of the elderly are no longer classified as victims of poverty, they are much more likely to have incomes of less than $10 ()()()/year (Figure 2). This suggests that many elderly households with sufficient income to raise them above poverty levels, may still be unwilling to spend on conservation. Although most of the utilities offer special incentive programmes only to the low-income elderly, there are exceptions. The Georgia Power Company, for example, provides free weatherization services to all elderly households through their award-winning Seniors Lending a Helping Hand programme. Some utilities, such as Central Illinois Light and New York State Electric and Gas, offer all elderly households the same programme services that are offered to younger low-income households. Other utilities such as those in California and Maryland use more liberal low-income programme eligibility requirements for the elderly; for example, the elderly customers of the Southern California Gas Company are eligible at 200% of-federal guidelines instead of the 150% required for the non-elderly. In addition to the weatherization programmes described in this paper, there are other utility efforts to meet the information and communication needs of the elderly. A four-hour training programme designed to •

[ ] Householdsover 65

All households

30 25

i

20 O

Figure 2. Income distribution in 1984 for all households v households over 65 a. aThe source for this figure is: US Bureau of the Census, Statistical Abstract of US, 1985 (106th edition), Washington, DC, 1986.

E N E R G Y POLICY April 1988

o "1"

15 10

5 0

Under 500O

5OO0 9~9

10OOO 14~9

15000 19999

20000 24999

25000 34999

35000 50000 49999 and over

157

Conservation programmes for elderly

4°Berry, Hubbard and White, op cit, Ref 37. 4~John Cutting, New Hampshire Public Utility Commission, personal communication, April 1986. 42Ken Egel, 'Evaluation of an RCS program alternative: the Santa Monica energy fitness program', in the proceedings of Energy Conservation Program Evaluation: Practical Methods, Useful Results, The Second National Conference held in Chicago, sponsored by Argonne National Laboratory, Bonneville Power Administration, Illinois Department of Energy and Natural Resources, US Department of Energy, Vol I, 19-21 August, pp 191-200. 43Brown et al, op cit, Ref 24.

158

sensitize utility staff to the needs of the elderly, to develop staff skills for communicating with them more effectively, and to provide resources for helping older customers has been developed jointly by the Edison Electric Institute, the American Association of Retired Persons, and the Center for the Study of the Aging at North Texas State University. By January 1986 over 90 utilities had purchased this training programme for their employees. Several utilities also offer information workshops for the elderly. A particularly successful effort is the Wise Informed Seniors on Energy (WISE) programme offered by the Columbia Gas Company. These workshops include audience participation, role-playing, games, hands-on demonstrations and refreshments. They are often conducted at senior citizen centres and have been very well attended and received. Utility offerings to the elderly are not always motivated by PUC mandates. The Georgia Power programme, for example, was motivated by a recognition that existing conservation programmes were not reaching senior citizens, particularly those living in rural areas or small towns. Offering relief from rate increases to customers living on fixed incomes was another consideration. In this case, the decision to develop a programme for the elderly was made at the Chief Executive Officer level because of a sense of social responsibility toward the elderly and handicapped. The Senior Citizen's Peer Counselling Programme offered by the Nashville Electric Service, which is a Tennessee Valley Authority distributor, the Housewarming Programme offered by Puget Sound Power and the Seniors Weatherization Programme offered by Southwest Gas Company are further examples of programmes developed without PUC mandates. 4° Nearly all of the successful elderly programmes we have information about offer free direct installations of weatherization measures and all of them work closely with existing community groups and/or social service agencies (Table 5). In most instances, these groups and agencies verify the eligibility of the households, thus relieving the utilities of this burden. One utility, which did not use community groups in this capacity, reported that the costs and difficulties of validating eligibility was a major cause of the programme's demise. 41 Door-to-door canvassing with offers of immediate, free installations was used in several of the elderly programmes. This type of marketing has also been used in programmes for all age groups such as Operation Assist sponsored by the Alabama Gas Co and the Energy Fitness Programme operated by the City of Santa Monica. When the elderly are included in whole neighbourhood outreach efforts such as these, they participate at rates proportional to their representation in the general population. 42 An alternative personalized outreach approach used successfully by several utilities involve elderly employees or volunteers who visit elderly households, install measures during the visit, and offer information and counselling services (eg Georgia Power, Nashville Electric, Puget Power, and Southwest Gas). Florida Power and Light's Residential Window Treatment Programme (RWTP) is an example of a programme with high rates of elderly participation that was not designed to achieve that purpose (Table 6). Florida's Public Service Commission has a policy of not offering special conservation services or incentives to any particular market segments. Their position is that income redistribution activities are not among their appropriate roles. Nevertheless, the window treatment programme did attract the elderly at levels substantially above their representa-

E N E R G Y P O L I C Y April 1988

Conservation prograrnmes for elderly Table 5. Characteristics of weatherizetion programmes for the elderly.

Utility

PUC mandate

Community Income group eligibility involvement requirement

Free installation

Special features

Bonneville Power

No

Yes

Yes

Yes

Central Illinois

Yes

Yes

No

Yes

Georgia Power

No

Yes

No

Yes

Nashville Electric

No

Yes

Yes

Yes

National Fuel Gas Yes

Yes

Yes

Yes

New York State Electric & Gas

Yes

Yes

No

No

Pacific Gas and Electric

Yes

Yes

Yes

Yes

Puget Sound

No

Yes

Yes

Yes

Southern California Edison Southern California Gas

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Southwest Gas

No

Yes

Yes

Yes

Part of low-income programme Services of low-income programme are offered to all elderly households Hires elderly to deliver services, recruitment through community groups Young summer employees and senior volunteers deliver services Combines funding sources; part of lowincome programme Services of low-income programme are offered to all elderly households Part of low-income programme; contracts with community groups to deliver services Hires seniors to install measures Part of low-income programme Part of low-income programme; contracts with community groups to deliver services Senior volunteers install measures

tion in the population of households requesting a home energy survey (Table 6). Florida Power and Light's (FPL) residential conservation effort includes a walk-through audit and five incentive programmes which offer utility cost-sharing for household investments in energy efficiency. In the five incentive programmes FPL covers part of the cost of installations of efficient whole house cooling and heating equipment, solar film window treatments, water heaters, ceiling insulation and low-cost infiltration measures such as caulking and weatherstripping. Elderly customers were less likely than the non-elderly to request a walk-through audit: 28% of the audit participants were over 60 years of age compared with 44.7% of FPL's residential customers. Elderly customers were also less likely to participate in each of the incentive programmes except RWTP. The elderly were significantly more likely than the non-elderly to participate in the RWTP, based on a 'difference of means' test. The solar film window treatment option probably Table 6. Percentage of programme participants by age group in Florida Power and Light incentive programmes. aCWHP = Conservation Water Heating Programme bRCIP = Residential Ceiling Insulation Programme cRWTP = Residential Window Treatment Programme dHELP = Home Energy Loss Prevention Programme Source: Marilyn A. Brown, Linda G. Berry, Dennis L. White and Peter Zeidler. See Ref 24.

ENERGY POLICY April 1988

Age group

All audit customers

CWHP

RCIPb

RWTP ¢

HELPd

Under21 21-30 31-40 41-50 51-60 61-70 Over 70

0.5 8.1 24.2 19.8 18.9 22.6 5.9

0.6 9.6 36.2 27.2 16.5 8.4 1,5

0.6 8.1 23.0 21.4 20.9 20.3 5.6

0.3 5.1 16.8 14.6 21.9 21.9 7.5

0.1 6.6 22.0 19.5 19.6 19.6 6.5

159

Conservation programmes for elderly attracted the elderly because of its high visibility, easily understood benefits, and short payback. The high acceptance of this conservation measure by FPL's elderly customers suggests that other programmes for the elderly could increase response by offering measures with similar characteristics. The shared savings programme, RECAP, operated by GPU is an example of a programme that has been successfully implemented in several retirement communities. In the Jersey Central Power and Light Service area R E C A P contractors focused most of their efforts on retirement villages because there were, first, good opportunities for achieving reductions in energy use in these locations; second, economies of scale associated with the weatherization of a large number of fairly uniform dwellings; and third, advantages in working with condominium associations to market the programme. Response in the targeted retirement villages was high, and energy savings were significant. 44 In one retirement community of 3 000 households, there were more than 2 500 participants. However, the customer response to the same programme in the more heterogeneous communities served by Metropolitan Edison in the Reading, Pennsylvania area, was less among the elderly than would be expected from their representation in the general population (Table 4).

Federal and state efforts

44M.A. Brown and D.L. White, 'Stimulating energy conservation by sharing the savings: a community-based approach', Environment and Planning, A, 1987, forthcoming. 4sUS General Accounting Office, LowIncome Weatherization - Better Way of Meeting Needs in View of Limited Funds,

GAO/RCED-86-19, 1985.

160

Washington,

DC,

Federal programmes for the elderly Federal programmes, like utility-sponsored programmes, offer services mainly to the low-income elderly. The largest continuing federal programmes, the Weatherization Assistance Programme (WAP) and the Low Income House Energy Assistance Programme (LIHEAP), both target the low-income elderly and handicapped. The purpose of the D O E weatherization programme is to install energy conservation measures (insulation, caulking, storm windows, furnace efficiency modifications, etc) in low-income dwellings at no cost to the occupant. Implementation has entailed federal grants to states which have administered the funds through a variety of offices, particularly local Community Action Agencies. Priority for participation is given to the elderly and handicapped. The LIHEAP programmes provide assistance to low-income households in the form of payments for heating and cooling bills, and some weatherization. All states have supplemented federal income requirements with numerous other factors for eligibility, and inclusion of elderly persons is frequently one of these. However, neither of these programmes has funding levels that enable them to serve high proportions of the households. In the Department of Energy's low-income weatherization programme, for example, only about 10% of the eligible households received service during the first 10 years (1975-1985) of programme operation. 45 In recent years WAP funding was below earlier levels and no WAP budget will be included in President Reagan's FY 1988 budget. Unless Congress restores funding, WAP may disappear. At recent funding levels WAP could not complete the weatherization of eligible dwellings for over 60 years. LIHEAP funding also is quite limited in comparison to the need for assistance. According to Department of Health and Human Services estimates, the proportions of qualifying households that received LIHEAP funds varied among states from 12.5% to about 50%. The

E N E R G Y P O L I C Y April 1988

Conservation programmes for elderly average benefit nationally was $212 which covers 35% or less of household energy expenditures. The average amount of household energy bills remaining after benefits were received spanned $500 to $1 328 among the states. 46 In most states, of those households receiving L I H E A P assistance less than 30% had elderly household members. |n some states 30-50% of the assisted households had elderly members, 47 In contrast to W A P and L I H E A P , federal tax credits for weatherization, which are no longer in effect, provided the greatest benefits to middle- and upper-income households and were used almost exclusively by these groups. 4s Since the elderly are more likely than the general population to have incomes below $10 000, much of which is nontaxable, they probably benefited less from tax credits.

State programmes for the elderly State programmes for the elderly are largely dependent on federal funding. State Energy Offices, Energy Extension Services, and other state agencies operate a variety of programmes for the elderly. Since there is no single directory to these programmes, information was collected from a variety of sources in order to characterize the range of programme designs. The sources used included: 1. 2.

3. 4.

46National Consumer Law Center, Homes Without Heat; A Nationwide Study of Disconnected Natural Gas Users, Washing-

ton, DC, 1984. 47US Senate, Special Committee on Aging, Developments in Aging 1983, Senate Report 98-360, Volume I, US Government Printing Office, Washington, DC, 1984. 48E. Hirst, R. Goeltz and H. Manning, Household Retrofit Expenditures and the Federal Residential Energy Conservation Tax Credit, ORNL/CON-95, Oak Ridge

National Laboratory, Oak Ridge, TN, 1982.

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P O L I C Y April 1988

The Energy Information Resource Inventory (EIRI) maintained by D O E ' s Office of Scientific and Technical Information. Monthly issues of the Conservation Update (this publication is published by the Kentucky Energy Cabinet as a forum for sharing information on state and local programmes). The general energy literature. Telephone calls to managers of state energy programmes identified from the first three sources to obtain more complete data on their programmes and to solicit references to other programmes for the elderly.

Table 7 summarizes characteristics of the eight state energy programmes serving the elderly that were identified using the above methods. As was true of utility-sponsored programmes for the elderly, the vast majority of state programmes attempt to reach the elderly through community groups. Unlike their utility counterparts, state programmes rely primarily upon energy education rather than financial incentives. Only two of the eight state programmes offer free installation of retrofit measures, while 14 of the 15 utility programmes install measures free of charge. Perhaps because of their reliance upon energy education to motivate conservation, the state programmes tend to have no income eligibility requirements. Five of the eight programmes serve all senior citizens but only low-income non-elderly households. In many cases the information content is tailored specifically to the needs of the elderly (eg, stressing retrofit methods suitable for the physically handicapped). Elderly energy consultants are also frequently used to teach energy managements to seniors, as was true in several utility programmes. Overall, state energy programmes employ many of the same features as utility programmes - working with community groups and using senior energy consultants. They differ in that they tend to rely upon information and not incentives and are generally available to all senior citizens. 161

Conservation programmes for elderly Table 7. Characteristics of state energy programmes for the elderly. Community Income group eligibility involvement requirement

Free installation

Special features

Arizona Seniors Helping Seniors Programme

Yes

No

Yes

California Local Energy Programme for UnderServed Clients

Yes

No

No

Georgia Limited Income Energy Education Programme

Yes

No

No

Indiana Energy Conservation Workshops for elderly and fixed income

Yes

No

No

Louisiana Limited Resources Residential Programme

Yes

Yes

No

North Dakota Seniors Helping Seniors Programme

Yes

No

No

Energy Education for Yes Limited Resource Oklahomans

No

No

Vermont Senior Citizen Project

No

Yes

Slide/tape show and printed material used at public meetings; home energy audits and low-cost installations are offered free to senior homeowners A variety of programmes for seniors have been offered by various local agencies; a 1980 programme was the forerunner of the current Arizona Seniors Helping Seniors Programme Professionals and volunteers are trained to teach energy management to small groups and volunteers Demonstrates low cost/No cost measures, Noting methods for the physically handicapped Presentations at community centers followed by one-onone counseling Slide/tape show and printed materials used by Senior Energy Consultants who are trained to give talks to groups of seniors Professionals and volunteers are trained to teach energy management to small groups and individuals Newspaper columns and television shows are targeted at the elderly; senior volunteers are trained to install low-cost measures in the homes of independent living senior citizens

State programme

No

S u m m a r y and c o n c l u s i o n s Although greater than average opportunities for residential energy efficiency improvements exist among the elderly, most conservation programmes are not successful in reaching this subgroup. The typically low participation rates of the elderly in conservation programmes suggest the need for marketing strategies specifically designed to reach this group. Several diverse approaches are effective in stimulating conservation programme participation by the elderly. Door-to-door canvassing with free installation of measures, recruitment and verification of eligibility through existing community groups, peer services and counselling by other senior citizens, shared savings programmes offered in retirement 162

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Conservation programmes for elderly

villages, and rebate programmes that offer highly visible, easily understood measures with short paybacks have all attracted the elderly. Although a number of current programme offerings developed specifically for the elderly seem to be adequate in design, they do not begin to reach all of the elderly who need special services. Most utility programmes serve only the low-income elderly. Usually, efforts to reach the elderly are one component of a programme for low-income customers. Since over 85% of the elderly have incomes above poverty levels, most will not qualify for these programmes. Few utilities reach a large fraction of their low-income households either, regardless of age. Thus, a majority of the elderly, whatever their income level, do not receive conservation services from utilities. Federal programmes serve only the low-income elderly and are significantly underfunded relative to the need for services. State programmes tend to serve the elderly at all income levels but have limited coverage and tend to offer information rather than more tangible forms of assistance. There are" very few efforts to design programmes for the specific needs of senior citizens with adequate incomes. The elderly with adequate incomes may not need free programmes, but because of their low rates of participation in general market programmes, they do require special incentive, marketing, and/or information delivery systems if their high potential for energy efficiency improvements is to be realized. The elderly at all income levels share certain significant barriers to conservation investments and activities such as shorter planning horizons and diminished physical abilities. Other subsegments of the elderly market that have received little attention include: younger senior citizens, women living alone or with non-relatives, and older renters. The high potential for energy efficiency improvements and the increasing size of these market segments suggest that more attention to their needs is warranted.

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