*household refers to a social or functional unit pooling resources and living together in a house. As humans are social, it could conceivably capture their journeys out into the world away from home, driven by the social as well as economic impulse. In Danish, “husholdning” refers to the household economy, a concept that captures more closely the economic unit I will be discussing.
In Canada, 78% of energy use in our homes goes toward space heating (60%) and water heating (18%), with appliances (15%), lighting (4%), and space cooling (3%) making up the balance of consumption.
Fortunately, we’ve become more efficient in our use of home energy. Between 2000 and 2021, energy use increased by 10%, but would have grown by 21% had we not used energy more efficiently. Efficiency savings during this period of 890PJ meant end-user savings of $27billion.
This is not only to do with better insulation or switching to efficient appliances and lightbulbs. In part, the overall stock of apartment-style housing in Canada grew during this period from 31% to 34% of all homes, and when it comes to space heating, at least, apartments generally retain heat more efficiently than detached homes, which represented 52% of all homes as of 2021.
So the average Canadian is better off with more dollars in their pocket, right? Well that depends….
Despite the savings from using less energy, we’ve still felt the anxiety of rising prices. Energy is a volatile contributor to consumer prices and often drives increases in consumer price indices. In 2021, in-home energy expenditure by Canadian households averaged $2,225, or approximately 3% of average disposable income. But this doesn’t take into account another large energy expenditure for households: energy for transportation.
Home energy is roughly 50% of a family’s energy spending budget. So … add another $2,000-$2,500 to the ledger for fuel prices for the typical family. Now we’re at 5-6% of disposable income. But if this sounds about right from your own experience, count yourself lucky.
For a significant portion of Canadians, that figure is closer to 10% of disposable income. Typically, lower income families spend between 2 and 3x their income on energy than higher income families. And where you live in Canada counts for a lot. In some parts of Canada, low-income families in some regions may spend as much as 26% of their overall budget on total energy costs, taking into account both transport and home energy consumption, with one-in-four low-income households spending 15% on energy bills.
And for 50% of that expenditure, energy efficiency savings haven’t applied. No matter how old you are, you’ve lived your entire life surrounded by vehicles propelled by an engine designed to combust fuel internally. While manufacturers might boast about the fuel efficiency of their cars or trucks, they can’t avoid the physics that dictates that only 25% of fuel consumed by such a vehicle goes into moving it down the road. The other 75% produces heat energy, of which 65% is wasted. To be clear, that’s a waste of 48% or $1,100 of your energy transportation spending per year (for the average household).
Too often, personal transport and housing are thought of as two different, unrelated topics. But when looked at from the standpoint of a household and its economy, its husholdning, through an energy efficiency and cost savings lens, they are thoroughly integrated. So, addressing household affordability, rather than just housing affordability, brings in the other half of our energy spending and so could yield substantial benefits.
