Stimulus funds to benefit homeowners with energy-efficiency

In Santos Espinosa's small beige house near Arden Fair mall last week, a crew installed fluorescent lightbulbs, swapped out an old water heater and filled drafty gaps beneath doors.

For thousands of Sacramento-area households, this sort of work stands to be the biggest direct benefit of the federal economic stimulus package. The bill pumps at least $20 billion into energy efficiency, by far the largest such investment in U.S. history.

Many details of how the stimulus funds will be spent have yet to be finalized, but the bill outlines a bonanza for homes, businesses and the public sector.

Grants targeting low-income households like Espinosa's will jump at least fivefold. All homeowners will get a tax credit (up to $1,500) that's worth up to 30 percent of a project's cost – three times as much as is currently offered. Cities and counties will get millions to cut waste in their buildings and fund efficiency initiatives. Sacramento-area universities are hoping for grants to expand efficiency research. Local venture capitalists say the funding should help new green-tech companies get off the ground.

Economists say an investment in efficiency delivers a double benefit. Spending on installation boosts manufacturers, hardware suppliers and construction workers. Lower utility bills give households and businesses more money to pour back into the local economy. And that local spending, said David Roland-Holst, a professor of economics at the University of California, Berkeley, delivers far more job-creating punch than money spent on energy, much of which flows out of the state to buy fossil fuels.

"It really is a potent stimulus," he said.

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