Renters Use More Electricity

Economist at the Haas School of Business of the University of California, Berkely recently examined the differences in the use of energy efficient appliances among rented and owner-occupied dwellings. The findings conclude that renters are paying significantly more for electricity than their owner-occupied counterparts.

Energy efficient appliances reduce energy cost by reducing electricity consumption. Energy Star appliances, including dishwashers and window air-conditioners, can reduce electricity consumption by 10 to 30%. These appliances have gained a great deal of traction over the past decade as they have become affordable for the average household. Renters, however, often lose out.

Using national statistics, the economists found that in owner-occupied dwellings, 45% of washing machines are Energy Star-rated, while only 17% of washing machines in renter-occupied dwellings are energy efficient. Even when factors such as household income, demographics, electricity prices, and weather were taken into account, huge differences remained when examining the rate of energy efficient appliances.

Unless a landlord is paying the utility bill, he or she is not likely to purchase energy efficient appliances since they are still more expensive than traditional appliances. This results in renters paying more for electricity.

It is not likely that this renter problem will be solved any time soon through legislation or regulation. However, renters and landlords can work on the individual level to save money for renters while not driving up costs for landlords:

Landlords will benefit by providing energy efficient appliances because their renters will be more satisfied with their reduced electric bills. This, of course, is often not a sufficient benefit when considering the cost of appliances, but landlords could make up for the difference by charging slightly higher rent prices For example, the landlord can furnish the dwelling with ALL energy efficient appliances and then advertise the unit as "Energy Efficient" or "Energy Star Certified" (visit EnergyStar.gov to learn about the certification process). Landlords will be able to charge slightly higher rental prices for fully efficient units.

Renters should inquire about energy efficient appliances prior to signing a rental lease. By doing this, renters are informed and landlords become aware of the demand for energy efficient appliances. If an appliance breaks during a renter's lease, the renter can also suggest that an energy efficient appliance be purchased while citing the benefits.

Until traditional appliances are phased out and replaced by energy efficient appliances, this renter-landlord issue will continue to exist at some level. On the other hand, as demand for these appliances increases, more landlords will react in order to acquire and retain reliable and appealing tenants.