Evaluating a Refrigerator Replacement Program For Low-Income Customers as a Cost-Effective Climate Strategy

The energy transition is driving the implementation of cleaner energy infrastructure and more efficient technology for millions of Americans. Two significant pieces of American legislation, the Inflation Reduction Act (IRA) and the Bipartisan Infrastructure Law (BIL) are driving the transition in the U.S., aiming to enhance energy efficiency across the country. However, low-income communities continue to face significant barriers to accessing rebates to replace energy-efficient appliances. This study employs a mixed-methods approach to examine whether a streamlined program to replace outdated, inefficient refrigerators in low-income households could serve as a cost-effective strategy to reduce Greenhouse Gas (GHG) emissions, improve energy security for low-income customers, and address administrative barriers in accessing federal incentives.

We first explore administrative challenges, including application complexities, technological barriers, and eligibility discrepancies that hinder low-income households from fully benefiting from energy efficiency incentives, to establish the problem present with rebate programs. We then utilize emissions calculations alongside grid decarbonization assumptions to conduct a cost-benefit analysis that evaluates the energy efficiency and environmental impact of replacing outdated refrigerators with modern ENERGY STAR-certified models. Our results demonstrate that replacing outdated refrigerators with energy-efficient models significantly reduces electricity consumption and carbon emissions. Given that the program costs for the three scenarios analyzed are less than the social cost of carbon (SC-CO₂) estimated at $194 per metric ton CO₂e, results suggest that a refrigerator replacement program should be considered a cost-effective, accessible climate strategy that provides energy security benefits to low-income households. Ultimately, the outcomes of this research are crucial to better understanding practical adaptive solutions for a more economically viable and equitable energy transition.