Retrofitting Our Way Back to Economic Recovery

According to the Recovery Through Retrofit Report unveiled today by Vice President Joe Biden the country’s 130 million homes together generate more than 20% of the nation’s carbon dioxide greenhouse gas emissions. This is one of the most significant contributing sources in the country to global warming. Existing techniques and technologies in energy efficiency retrofitting can reduce home energy use by up to 40 percent per home on average which would also lower our national greenhouse gas emissions by 160 million metric tons annually by the year 2020. In addition doing so would reduce home energy bills by $21 billion a year and over time these savings would more than pay for the high up-front costs for energy efficiency retrofitting.

The report builds on investments made in the American Recovery and Reinvestment Act of 2009 to expand green job opportunities and boost energy savings by making homes more energy efficient. The report grew out of a Middle Class Task Force meeting earlier this year, in which the Vice President asked the CEQ to develop a proposal for federal action to lay the groundwork for a self-sustaining home energy efficiency retrofit industry. In response, CEQ facilitated a broad interagency process with the Office of the Vice President, 11 departments and agencies, and six White House offices to develop recommendations for how to use existing authority and funding to accomplish this goal.

By encouraging a national home energy efficiency retrofit market to grow the government can help boost the economic prospects of millions of Americans many of whom have been very hard hit by the recession. Home retrofits can potentially help people earn money, as home retrofit workers, while also helping them save money, by lowering their utility bills. By encouraging nationwide weatherization of homes, workers of all skill levels will be trained, engaged, and will participate in ramping up a national home retrofit market.

By implementing Recovery Through Retrofit’s recommendations, it is hoped that the Federal Government can lay the groundwork for a self-sustaining and growing home energy efficiency retrofit industry. The newly released Report provides a roadmap of how the Federal Government can use its existing authorities and funds to unlock private capital and mobilize our communities and jump start this sector.

Joining the Vice President in the announcement ceremony today and underlining the importance that the administration attaches to this report were Nancy Sutley, chair of the White House Council on Environmental Quality (CEQ); Steven Chu, Secretary of Energy; Hilda Solis, Secretary of Labor; Shaun Donovan, Secretary of Housing and Urban Development; and Karen Mills, Administrator of the Small Business Administration.

Barriers Standing in the way of a National Retrofit Market

Several critical barriers have prevented a self-sustaining retrofit market from forming in spite of the clear economic and environmental benefits of improving home energy efficiency. The report identifies the following barriers that have stood in the way of home energy efficiency retrofitting:

1. Access to Information: Consumers do not have access to straightforward and reliable information on home energy retrofits that they need to make informed decisions.

2. Access to Financing: Homeowners face high upfront costs and many are concerned that they will be prevented from recouping the value of their investment if they choose to sell their home. These upfront costs are often beyond the average homeowner’s budget.

3. Access to Skilled Workers: There are currently not enough skilled workers and green entrepreneurs to expand weatherization and efficiency retrofit programs on a national scale.

Recommendations Made by the Report

The Recovery Act allocates about $80 billion to projects related to energy and the environment with much of this money being targeted toward improving the energy efficiency in buildings. This provides a unique opportunity to expand investments in energy retrofits and develop community-based programs on a very large scale, putting our country on a path to achieving real reductions in greenhouse gases and fossil energy consumption, while also contributing to the economic recovery our country needs.

A foundation for a self-sustaining energy efficiency retrofit market will be built by coordinating Recovery Act funds, Federal Departments and Agencies and resources; through building strong partnerships with states and local communities; and by targeting government policy changes. Through implementation of the recommendations in this report, the Federal Government will leverage private capital, streamline the retrofitting process, and reduce energy costs for homeowners.

Provide American Homeowners with Straightforward and Reliable Home Energy Retrofit Information

The report makes the following recommendations to address the problem of unreliable access to information.

Develop an ENERGY STAR® performance label for homes that have had energy efficiency retrofits. The Department of Energy and the Environmental Protection Agency are working together to develop an energy performance label for these homes. The end result will be an easily recognizable benchmark that energy auditors, retrofitters, lenders, realtors, and consumers can use to compare home energy performance and identify the most energy efficient homes.

Develop a national home energy performance measure to establish a standardized home energy performance measure applicable to every home in America. This will make it much easier for consumers to understand how much they can save by retrofitting their home and also give lenders the information they need to work with homeowners who are looking to invest in home energy improvements.

Reduce High Upfront Costs and Make it Easy for Homeowners to Borrow Money for Home Energy Retrofits

To help homeowners get access to financing as well as reduce the uncertainty about recovering the high upfront costs associated with energy efficiency retrofits the following recommendations are made:

Support municipal energy financing Property tax or municipal energy financing allows the costs of retrofits to be added to a homeowner’s property tax bill, with monthly payments generally lower than utility bill savings. This arrangement attaches the costs of the energy retrofit to the property, not the individual, eliminating uncertainty about recovering the cost of the improvements if the property is sold.

Expand the use of energy efficient mortgages, simplifying the process of obtaining and financing energy retrofits at a home’s point of sale. This effort will also work to lower the cost of home energy audits as well as the monthly financing payments, and ensure that retrofits are accurately valued in the appraisal process.

Expanding state revolving loan funds from 16 states to all 50 states will leverage private capital and achieve economies of scale necessary to produce consistent and affordable loan products.

Mobilize a Well-Trained National Energy Retrofit Workforce and Expand Good, Green Job Opportunities for All American Workers

To address the shortage of trained green collar workers that are needed the Recovery Through Retrofit Report recommends:

Establish uniform national workforce certifications and training standards to qualify energy efficiency and retrofit workers and industry training providers and to establish the foundation of consumer confidence that work will be completed correctly and produce the expected energy savings and benefits. The Department of Labor, the Department of Energy, the Department of Housing and Urban Development, and the Environmental Protection Agency will work in collaboration to assess existing standards and training programs and develop consistent models, guides, and best practices for training and certification.

Moving Forward

In order to ensure that the recommendations in this Report are implemented, CEQ will convene an interagency Energy Retrofit Working Group, chaired by the Department of Energy, the Department of Housing and Urban Development, the Department of Agriculture, the Department of Labor, and the Environmental Protection Agency. The Working Group will track its progress and operate as the single point of contact for the successful implementation of this effort and will report to the Vice President regularly on its progress towards implementing each of the recommendations identified in this Report.

Conclusion

The report concludes by saying that, coordinated and principled Federal actions, in partnership with states, cities, counties, and the existing home energy industry, may be able to tackle the challenges faced by the current retrofit market. These recommendations can pave the way for a self-sustaining retrofit market, a market that can reliably cut energy bills while also creating good green jobs and saving consumers money. Building on the foundation of the Recovery Act to jumpstart a thriving, private market for energy efficient and healthy home retrofitting that will put people back to work while also reducing our impact on the environment.

Millions of Americans, who are currently experiencing considerable economic hardship could certainly benefit from a growing energy retrofit sector providing millions of good green collar jobs and saving billions on their energy bills. Hopefully the ideas expressed in this report can be translated into tangible actions on the ground. If they can a virtuous cycle of increasing energy efficiency and lower on-going costs can be established will be established.

© 2009, Chris de Morsella. All rights reserved. Do not republish.

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Author: Chris de Morsella (146 Articles)

After a decade performing as a lead guitarist for rock bands, Chris de Morsella decided to return to the career his uncle mentored him in as a youth....Software Engineering. Since that time he has thrown himself into his work. He has designed a compound document publishing architecture for regulatory submissions capable of handling very large multi-document FDA regulatory drug approval submissions, for Liquent, a division of Thompson Publishing. At the Associated Press, Chris worked with senior editors at facilities around the world, to develop a solution for replacing existing editorial systems with an integrated international content management solution. He lead the design effort at Microsoft for a help system for mobile devices designed to provide contextual help for users. Chris also helped to develop the web assisted installer for LifeCam2.0, the software for Microsoft’s web cam and developed late breaking features for the product He also served with the Rhapsody client team to redesign and build a major new release of Real Networks Rhapsody client product. His most recent assignment has been Working with the Outlook Mobile Time Management team for the next release of Outlook Mobile for the SmartPhone. Chris' interests are in green building and architecture, smart grid, the cloud, geo-thermal energy, solar energy, smart growth, organic farming and permaculture. Follow Chris on Twitter.