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Split Incentives Cost Minnesotans Millions

1 May 2012

Over 1 million Minnesotans rent their living space, and unfortunately, even the most passionate energy saving renters can be stuck with old fridges, drafty walls and little power to do anything about it.  When a property owner isn’t responsible for utility bills, it creates a split incentive – that is, renters aren’t motivated to shell out for structural changes or new equipment that they can’t take with them, and landlords aren’t motivated to pay for energy-saving changes that they won’t see any savings from.

The biggest problem here is that the energy saving potential of rental properties is HUGE.   A report by MN2020 found that if fridges over 10 years of age in rental properties were replaced (and there are about 88,000), Minnesota renters could save up to $3.7 million a year!   The article suggests various policy proposals to help get this on the move including mandated public energy use disclosures and rebates for replacing old refrigerators:

This is a modest proposal. It isn’t political, or even urgent, but it is something we can start working on together to move Minnesota forward.

You don’t have to wait until policy and rebates catch up  – if you are a renter with an old fridge or other energy issues, it’s worth at least starting a conversation with your landlord about them.  By talking about the split incentive, you may be able to come to a compromise that could get that old fridge out of your kitchen and give your landlord a nice selling point for future tenants.

In the meantime, keep doing your best and check out the renters page on the Minnesota Energy Challenge to find out about all the actions you can take to reduce energy waste!

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