Public attitudes on Home

Energy Problems

A majority of homeowners nationwide recognize their homes waste energy and have reacted by taking conservation measures to hold down energy costs. The implications in such a major shift in public attitudes means a continued growth in sales for those selling energy-related products.

In a national study on home energy issues commissioned by The Dow Chemical Co.. it was learned that 63olt of U.S. homeowners admitted their homes could be more energy efficient. To these homeowners and others. 9401, in all. home energy costs are a problem that has been counteracted by some energy-saving action in the 12 months prior to the study.

"The current energy situation is being taken quite seriously by a vast majority of Americans today. On the average, the typical homeowner took approximately four steps with the intent of reducing energy costs," notes Michael Box. remodeling market manager at Dow.

The survey of homeowners. conducted during the fall of 1979 by Opinion Research Corp., poinrs out the most popular conservation measures undertaken were those that did not require major capital investments. More than three quar- ters of American homeowners lowered their winter thermostats.

55%r added weather stripping and/ or caulking; and another 5l|%, Iowered their water heater thermosrat (or insulated it). Improvements which upgraded the energy efficiency of major home heat loss areas (i.e., walls, attics, windows and doors), and which required a major capital expenditure, were not as popular with homeowners. Only 2l%r of all homeowners added insulation to their home's wall. basement or crawl space area. Slightly ntore

Story at a Glance

What dealers and wholesalers should know about how the public perceives energy problems. surYeys indicate consumer unawareness of insulation costs and benefits.

homeowners (3101,) installed attic insulation. and 39Vr added storm door and/or windows "lnflation and a general lack of knowledge on how to econonrically invest the energy conservation dollar may be preventing homeowners from taking the nrost effective energy-saving action," observes Box.

This situation apparently will continue to exist for the next year or two. Anrong those homeowners planning to take some future conservation measure. most will make non-capital improvenrents. In fact, 560i of all honreowners indicated they were not planning to take further action to reduce home energy costs.

It is the owners of older. existins housing, however. who plan ro undertake additional home improvement nteasures in the name of energy conservation more so than the owners ofnewer honres. In addition. owners of hontes over 30 years old plan to take a greater nunrber of steps in the next year or two. This situation exists despite the nearly identical owner perception of their home's energy efficiency.

"Owners of newer homes nrav be living with the false securiry rhat because their home was built in the 1950s or'60s it possesses adequate energy-efficient features. Research has shown, though, that many existing homes today are experiencing heat loss of which their owners are unaware," maintains Michael Box. "Furthermore. owners of older homes may have more opportunities to implement energy-saving actions in the future due to the greater general need for aesthetic improvements or remodeling in honres of this age."

Homeowners who are planning to insulate their homes in the near future expressed a willingness to spend an average of $547 for this purpose. If any of these homeowners are also planning to re-side their existing home, for example, they can add %" Styrofoanr'- TG brand insulation under the new siding, spending less than the average investment indicated while upgrading their home's insulation protection.

Of those homeowners (22"1') planning to add insulation 650/r, singled out the attic area for improvement, and an equal number are willing to upgrade either the wall or basement/crawl space areas.

On the other hand, the survey disclosed that 5lolr of U.S. homeowners planning to add insulation had no idea how much thev are willing to spend.

" Homeowners'uncertainty of insulation costs appears to be a somewhat common occurence across the country," concludes Box from the survey findings. "lt is expected that these same homeowners are probably unaware of the savings which can result from added insulation protection "

For example, Styrofoam brand insulation under new siding typicaffy adds 20% to the cost of the standard re-siding project. Yet it can pay for itself in the form of reduced energy cost within five years time.

Payback time can vary depending on household lifestyle, climate, energy cost and existing building components. FTC rulings will soon require all sellers of insulation to provide product "R-value" information to consumers. R-value is a nleasure of a product's insulating ability. The higher the R-value, the greater the insulating power.

Offsetting consumer awareness of insulation costs is a wide-ranging awareness of the Federal Energy Act tax credit lor energy-saving improvements made to an existing home. Three-fourths of all homeowners surveyed were aware that the federal inconre tax credil is available.

IRS officials feel equally strong about consumer awareness of the tax credit. According to IRS figures, approximately six million Americans filed for the Energy Act tax credit on their 1978 income tax returns. Nearly $600 million in tax credit was claimed by those filing for an average return ofabout $100. The tax credit can total up to $300 and is deducted directly from the annual income tax bill. After figuring his income tax for the past year, the homeowner simply subtracts I 5(l' of the first $2,000 spent on qualifying energy-saving products from the total inconte tax to be paid. A special fornr (No. 5695) is used in addition 10 the regular income tax form. The form and information about which products qualify for tax credit can be obtained from the local IRS office. Almost all energy-saving home improvements qualify for a tax credit.

In addition to the tax credit, most homeowners (83V,) recognized that the addition of energy efficient features can increase the value of an existing home at re-sale time. This is consistent with a previous Dow Chemical/Opinion Research survey in which 66(X, of real estate brokers and 78ol' of appraisers stated well-insulated homes are worth more at resale.