Program aims to encourage weatherization of homes

McClatchy NewspapersOctober 19, 2009 

WASHINGTON -- The White House on Monday released a plan to remove some of the obstacles that prevent middle-class Americans from getting energy audits and making their homes more energy-efficient.

America's nearly 130 million homes together generate about 20 percent of the nation's emissions of carbon dioxide, the principal heat-trapping gas, says a report by the White House Council on Environmental Quality and Vice President Joe Biden's Middle Class Task Force.

Biden said the plan would add jobs that couldn't be outsourced and make it easier for families to save money and reduce greenhouse gas emissions.

The White House estimates that weatherization could lower greenhouse gas emissions by as much as 160 million metric tons annually by 2020, but one of the biggest hurdles to greater energy efficiency is cost.

Although energy efficiency retrofits save money on energy bills, they can cost as much as hundreds or thousands of dollars, depending on how much work needs to be done. The new recommendations, which use existing federal funding, include some ways to finance projects so homeowners will be more likely to undertake them.

Installing more insulation and more energy efficient doors, windows, lighting, water heaters, air conditioning and appliances can reduce energy use in a house by as much as 40 percent, meaning considerable monthly savings on utility bills.

The new program is intended to expand a national energy retrofit market beyond the $5 billion weatherization program for low-income households in this year’s economic stimulus package. A family of four that earns less than $44,100 a year, or $55,140 in Alaska and $50,720 in Hawaii can qualify for the low-income program.

The report suggests three ways to make financing for efficiency improvements more attractive:

  • Add the cost of retrofits to a homeowner's property tax bill. If a house were sold, the buyer would continue to pay for the improvements through the tax bill. The costs would be spread out over enough time so that the monthly payments generally would be lower than the savings on utility bills.
  • Make energy efficiency expenses part of the mortgage when a house is bought or refinanced. That program is already available, but the report said there have been “significant barriers” to widespread use. It suggests ways to overcome those barriers, such as making it easier to rate a house's energy performance.
  • Expand state revolving loan funds, which help consumers borrow money for weatherization at lower interest rates. These funds are available now in 16 states, and the report recommends expanding them to the other 34.

The report also recommends improving information about weatherization.

For example, the federal government will develop an energy performance label for houses with efficiency upgrades that's similar to the Energy Star label for new houses, which makes it possible to estimate monthly energy costs.

The plan also calls for national certification and training standards for workers who make the efficiency improvements.

Part of Monday’s announcement will be a new $454 million program from the Department of Energy that will look for ways to retrofit residential and commercial buildings in entire neighborhoods or communities, taking advantage of economies of scale that would lower individual costs.

The federal funds would go to create eight to 20 pilot programs that would organize the group offers and provide ways to finance the improvements. The DOE hasn't announced where the programs will be. Energy Secretary Steven Chu said earlier this month at a briefing for representatives of clean energy businesses that if it's successful, the department hopes to expand it.

In May, Biden's Middle Class Task Force asked the White House Council on Environmental Quality to propose a plan to expand residential energy retrofits. The CEQ worked with the Department of Energy and other government agencies on the recommendations.

"This report builds on the foundation laid in the Recovery Act to expand green job and business opportunities for the middle class while ensuring that the energy efficiency market will thrive for years to come," said Nancy Sutley, the Chair of the CEQ.

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