It's a situation most of us can identify with--our furnace or water heater breaks or our home air conditioning system fails. While it makes sense to replace these outdated appliances for more energy-efficient ones, the immediate need to fix the problem usually wins out. Most of us haven't saved enough to do an appliance overhaul. So we fix the issue, continue with the status quo, and -- as an unintended result -- we keep wasting power.
It's estimated that there is $1 trillion in cost savings currently locked up in the form of inefficient appliances, furnaces, water heaters and other energy-wasting parts of our homes. We have a tremendous untapped opportunity to create jobs and invest in our communities and cities today by making energy efficiency upgrades in our homes. Beyond doing good in our community, using more efficient appliances and other easy-to-implement solutions, the average household can save nearly $400 per year.
While the potential savings from changes are great, the barriers are high. The cost of the average residential energy efficiency improvement project is up to $10,000.
At Citi, we're working with Kilowatt Financial to help make energy efficient upgrades more convenient and accessible through fast, low-cost financing. Kilowatt is a startup that leverages deep experience in consumer finance and a mission to help meet the demand for more residential solar power and energy efficiency improvements.
Kilowatt has created algorithms to speed up the homeowner credit approval process for both energy efficiency upgrades and solar panel installation. Now, because of Kilowatt, when a homeowner experiences an emergency with an inefficient appliance, they have the opportunity to get a quick loan so that they can replace it with an energy-efficient one. Working through an approved contractor, in over 80 percent of cases a homeowner can get a credit answer within fifteen seconds.
In the past, homeowner energy efficiency improvements have been difficult to finance because of the small scale of individual projects and the need for fast, accurate credit decisions.
Earlier this year, my team at Citi closed a $100 million warehouse debt facility with Kilowatt allowing us to lend at a very competitive cost but with great flexibility and fast response to consumer and contractors.
Kilowatt Financial has already helped more than 20,000 households finance energy efficiency improvements or convert to solar power. To date that's keeping 39,000 metric tons of carbon out of the atmosphere and is the equivalent of taking almost 8,300 cars off the roads. With the new debt facility and securitization made possible by Citi, Kilowatt Financial is accelerating its progress, and making our communities, cities and the environment cleaner and safer.