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Energy Efficiency Retrofits: Cutting energy costs and creating new jobs

September 3, 2010

State and federal incentives (including stimulus funding) are fueling a nationwide market for energy efficiency retrofits in older homes. Retrofits cut energy costs, curb energy demand, lower environmental impacts and create jobs. Expanding these programs could help to restore local economies at a time of recession. However, despite support from the Obama Administration, Congressional action is stalled.

Incentives now available: Several new energy efficiency programs have received more than $3 billion under the American Recovery and Reinvestment Act funded by the Department of Energy’s Energy Efficiency and Conservation Block Grant Program. The money has boosted  incentive programs, revolving loan funds, and on-bill financing for energy efficiency across the country.

Colin Choney, Vice President of the Washington D.C. energy auditing company E2COHouse (pronounced “eco house”) said that many auditing companies do about 3-6 audits per day, which equates to more than a thousand per year. 

Choney said the audits usually costs $100 to $600 and the recommended investments can range up to ten thousand dollars, but clients usually see about 10 to 40 percent savings on their energy bills.  Recoup of the investments varies case by case, determined by a household’s energy consumption, and the upgrades they make.

The prices are heft initially. a few loans  are available to help afford upfront costs, like such as the FHA’s energy efficiency loans. But Choney said for the company’s average, working-class client, rarely will anyone seek to have all the investments installed at once. They do it little by little. More incentives would help home and building owners accelerate the pace of upgrades.

In the Washington, DC metropolitan area Pepco  and other electricity providers have offered to pay for home energy audits, betting that customers will seek to install the upgrades. By doing so they lessen the need to add new and costly power plants creating win-wins for both power companies and consumers.  In Maryland, the Maryland Energy Administration plans to launch or expand programs to lead the state by example in providing low-interest loans for energy effiency and renewable savings projects.

Savings and audits have translated into growth in other areas too, like contracting jobs. A nonprofit project called WeatherizeDC has connected about 200 homeowners with contractors to create 4 jobs in underrepresented wards in the area, said Sam Witherbee, the nonprofit’s Program Director.  This number could grow by leaps and bounds if more people were able to retrofit. A 2008 study by the University of California, Berkeley found that the state’s energy-effiency policies created more than 1.5 million jobs over 30 years.

Homeowners may be better able to finance energy-efficiency upgrades with federal program. (Source: DOE)

“When consumers shift one dollar of demand from electricity to groceries,’ the report said, they create jobs among retailers, wholesalers, food processors and other businesses,” – NYT, Green Policies in California Generated Jobs, Study Finds

Congress needs to invest: Witherbee, however,  is worried that Congressional support needed to expand the emerging retrofit market is iffy. Currently a program called Homestar is pending in the Senate; it would provide rebates to customers seeking to those seeking to more efficient. Homestar features a two-part rebates program, gold and silver star. The Gold Star rebates awards money based on energy efficiency improvement achieved by the retrofit.

According to Witherbee homeowners interested in retrofits say they are waiting until federal or state governments or energy companies provide more funding for the improvements.  Lack of Congressional acts to further hinder the potentially large job creating potential of the retrofit market.


Help support HomeStar legislation by joining this online coalition, Efficiency First. To read more about Home Star or to register your support – click here.

If you are interested in a retrofit: Check with your electricity provider to see if your home or business is eligible to receive grants or other assistance  for energy efficiency upgrades.  EPA/DOE’s Energy Star website has plenty of resources for homeowners.

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