The Weatherization Study That Should Change How You Quote Energy Savings
The most rigorous field test ever run on home weatherization found that the savings were about half the cost of the work. Not half of what was hoped. Half of what was paid.
In 2018, economists Meredith Fowlie, Michael Greenstone, and Catherine Wolfram published a randomized controlled trial covering more than 30,000 Michigan households in the federal Weatherization Assistance Program: attic insulation, air sealing, furnace work. Real upgrades, real meters, real winters.
The numbers: upfront costs ran about twice the measured energy savings. The engineering models used to qualify the upgrades predicted roughly 2.5 times the savings that actually appeared on utility bills. Average annual rate of return: about negative 9.5%.
And here's the twist. It wasn't the rebound effect. The researchers found no evidence that weatherized homes ran warmer than the control group. People weren't spending the savings on comfort. The models were just wrong about how real houses behave.
The caveats are real too: low-income single-family homes, one state, free upgrades through a federal program. Equipment swaps and owner-funded retrofits can perform closer to projections. But the takeaway stands for anyone quoting or buying efficiency work: modeled savings are a ceiling, not a midpoint.
If a contractor promises a five-year payback off audit software, the right follow-up is "based on the model, or on measured bills from jobs like mine?" The good ones know the difference.
The paper: Fowlie, Greenstone & Wolfram, The Quarterly Journal of Economics 133(3), 2018.
Full breakdown, including how contractors should quote payback honestly: ServiceMag