Energy Savings Coming Soon for Low-Income Virginians

Here’s some great energy efficiency news for Virginia worth celebrating—especially on today’s 5th annual Energy Efficiency Day when we highlight the many ways we can save money in our homes through smart investments in energy efficiency and weatherization programs.

Energy efficiency benefits help us all

Thanks to a law just passed by the state legislature, thousands of low-income Virginians who need relief most will save on excessively high energy bills. This new initiative, sponsored by Delegate Charniele Herring and supported by NRDC and partners for years, directs proceeds from a carbon-reduction program to low-income energy efficiency services that will help lower electric bills. 

Energy costs are a concern for Virginians because the state’s electricity bills are the 7th highest in the nation, but especially so for low-income households paying a larger percentage of their income for energy. And given the current health and economic crisis, an opportunity to provide long-term savings for low-income families takes on greater importance.

Here’s how this new savings opportunity will work:

Virginia will be a new member of a regional partnership to drive down climate pollution (the Regional Greenhouse Gas Initiative, or  “RGGI”), and the money from selling pollution allowances under this program will be directed to improve energy efficiency—and thus reduce the energy burden—of low-income residents across the Commonwealth. These revenues are estimated to amount to well over $500 million across the rest of this decade, and could provide a major new tool for relief, especially for hard to reach areas, like apartment complexes and other rental properties.  

Even before the COVID-19 pandemic hit, areas of the Commonwealth already had some of the highest “energy burdens” in the nation, with low-income Virginians, and Black and Latino households bearing an excessive, disproportionate burden. That is, the energy bills of low-income citizens as a percentage of their income are much too high. Also, energy bills as a percentage of income are much higher for Black and Latino residents than they are for white residents.

What are the practical implications of these disparities? Those excess dollars required for energy bills in Virginia are likely dollars diverted from other essential purposes, like food, medicine, or other household needs, given the lack of “disposable” income among low-income populations.

With the law now in place and significant annual funding rolling in beginning in 2021, some important work remains outstanding. To design this program, the Virginia Department of Housing and Community Development (DHCD) will soon embark on a stakeholder process to identify how best to spend and administer that more than $500 million in low-income energy efficiency investment over the next decade.

A well-designed program is essential to get that relief out the door starting in 2021, and in a way that maximizes bill reductions for struggling families in Virginia. There are two key design priorities we must get right. 

First, the program design must reflect the spirit of the legislation, which is to help lower the energy bills of residents who need energy efficiency improvements the most: that will require “deep energy retrofits” through weatherization upgrades such as additional insulation and tighter windows. 

Second, there are many low-income families who live in homes with health and safety issues or will require repairs before energy efficiency weatherization can take place. We need to prioritize revenues from RGGI to address these issues to help provide energy efficiency for all low-income residents, not just those whose homes are in good enough repair for weatherization improvements.

In the coming months, NRDC looks forward to working with DHCD and other interested parties to ensure that 2021, and every year thereafter, sees direct improvements to the quality of lives of all low-income Virginians. And improving energy efficiency can hold down energy costs, so they can spend money on essentials that will make their lives healthier, better, and more hopeful.   

About the Authors

Dawone Robinson

Eastern Region Co-Director, EEFA, Resilient Communities, Healthy People & Thriving Communities Program

Walton Shepherd

Virginia Policy Director, Climate & Clean Energy Program

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