Bridging the Energy Efficiency Gap for Low-Income Households in Charlottesville

University of Virginia, Charlottesville, Virginia, 22903, USA

^* Corresponding author: cyh7sb@virginia.edu

Abstract

Residential energy usage in Charlottesville, Virginia, accounts for nearly 30% of the city’s greenhouse gas emissions. Without significant changes, Charlottesville is unlikely to meet its goal of reducing emissions by 45% by 2030. Improving residential energy efficiency is key to lowering emissions and reducing energy costs for residents. However, the high upfront cost of these upgrades is unaffordable for over a third of Charlottesville households. As electricity prices rise due to Virginia’s upcoming carbon dioxide cap-and-trade program, low-income households that can’t afford efficiency upgrades will face higher energy bills and greater financial strain. This study explores the feasibility of a residential efficiency financing program designed to improve the affordability and accessibility of energy upgrades for low-income households in Charlottesville. Through a detailed benefit-cost analysis, various policy alternatives, including On-Bill Financing, Revolving Loan Fund, and Loan Loss Reserve, were evaluated for their effectiveness, equity, and implementation feasibility. The recommended option, On-Bill Financing, would allow Charlottesville Gas to cover the upfront costs of energy efficiency upgrades. Customers would repay the investment over time through their gas bills, thereby enjoying immediate reductions in energy consumption and costs. This policy would fairly enhance residential energy efficiency and provide critical financial assistance to households that otherwise couldn’t afford these upgrades.