The Beginning is Always the Hardest: Decision Costs of EmPower+ Application

• In Event: How Politics and Policy Impact Energy-Related Processes and Outcomes

Abstract

Would households take up and complete home energy upgrades if we provide easy-to-understand and personalized cost-saving information at the onset of these decisions?  Consumers commonly underinvest in energy-efficiency measures as if they valued future energy savings at a heavily discounted rate today (Allcott & Greenstone, 2012). Such underinvestment is particularly salient among low- and moderate-income (LMI) households, who have little disposable income to spare on energy-efficiency upgrades while experiencing a heavy energy burden (Lewis et al., 2020). LMI households’ underinvestment in energy efficiency measures is a missed opportunity for cost savings and carbon emission reductions. 

 

We propose to answer the research question by leveraging provisions by New York state’s EmPower+ program and High Efficiency and Appliance Rebate (HEAR) for home enclosure improvements, defined as air sealing, home insulation, and ventilation. We build a simple decision tool to help LMI homeowners understand the cost-savings of home enclosure based on their heating fuel, cooling appliance type, and home characteristics (e.g., home type, age, size). We use a survey experiment to test the effect of this decision tool, specifically, whether decision cost reduction (Spears, 2014) increases LMI homeowners' interest in applying for EmPower+. We commission YouGov to survey a representative sample of 1,000 LMI New York homeowners in late summer 2025, when home enclosure work is easy to implement. Beyond the experimental manipulation, we collect data on home energy conditions and willingness to pay to understand the calculus of LMI homeowners when they consider maintaining or upgrading their homes for energy efficiency.

 

We expect that reducing cognitive decision costs at the onset of home energy-efficiency upgrade decisions would increase homeowners' applications for energy-efficiency upgrade programs among LMI homeowners. As the HEAR rebates become available in 10 states and D.C. and grant applications from another 10 states are approved by Department of Energy, the findings from our study will shed light on how to encourage the take-up of IRA programs and accelerate decarbonization efforts in the residential sector. We also aim to facilitate theoretical development at the intersection of policy design, decision sciences, and sustainability by empirically examining the effect of decision costs under an energy upgrade policy context. 

Author

• Catherine Chen, Hamilton College
  Presenting Author