The Next Economic Stimulus: Energy Efficiency for Homes?

December 9, 2009 – Vol.14 No.38

THE NEXT ECONOMIC STIMULUS: ENERGY EFFICIENCY FOR HOMES?
by Bruce Mulliken, Green Energy News

In the next economic stimulus package President Obama wants to offer a rebate to homeowners who make energy efficiency and conservation improvements. No details yet. It’s Congress’s job to hash out the fine print. None the less, this is a good idea. Should it happen, the sooner the better.

--- An energy efficiency improvement is a gift that keeps on giving. Even small reductions in energy consumption translate into smaller utility bills. For the homeowner, money saved is money that can be spent elsewhere (or set aside).

--- Energy efficiency and conservation products tend to be U.S. made. Many brands of efficient windows, insulation, heating and air conditioning equipment and water heaters come out of U.S. factories. A energy efficiency rebate incentive would put these factories to work.

--- Some efficiency products, such as some brands of compact fluorescent and LED lights, as well as on-demand water heaters, are made overseas, which is no help to U.S. factories. Still, retailers and distributors of these imported products would benefit from rebate to homeowners.

--- Some efficiency and conservation upgrades can be done by homeowners, but many, such as installing new HVAC systems, are typically done by a local contractor. Along with the factories that make the equipment these contractors would receive the bulk of the new work created by an energy efficiency stimulus.

--- Energy efficiency and conservation goes hand-in-hand with renewables. The more efficient a home is the less power needed to draw from a solar, small wind or other renewable energy system. It’s almost mandatory (or at it least makes a whole lot of sense) to upgrade all home energy systems whenfa renewable energy system is installed. An efficiency upgrade rebate would help home renewable energy system sales; this is another Obama objective. Incentives for home renewables are still in place at the federal level as well as in some states.

--- Homes are responsible for more greenhouse gases than cars, particularly older homes. Without major remodeling it may be impossible to bring them up to the efficiency level of newer homes. Still, any energy improvement would help. A rebate would could push those improvements forward.

Oregon’s Senator Jeff Merkley issued the following statement in response to President Barack Obama’s announcement for the next stimulus package at the Brookings Institute in Washington about creating American jobs:

“Today, President Obama advocated for new job creation strategies to help families still suffering from unemployment and strengthen our economy. One of the strategies the president mentioned was a program that would provide incentives to consumers to make their homes more energy efficient.

“Buildings in every corner of America are in need of energy efficient upgrades that can reduce energy consumption and reduce energy bills. Renovating those buildings can create jobs in construction and manufacturing right away, and it provides a second economic boost by putting money back into the pockets of Americans through reductions in their energy bills.

“Incentives to encourage retrofits are a good first step, but I encourage the Obama Administration to go further and adopt a program to help families and small businesses pay for the renovations by offering them low-cost loans that can be repaid out of the savings on their energy bills. In August, I joined with Senator Lugar of Indiana to introduce the Clean Energy for Homes and Buildings Act that would create such a program nationally, and could serve as a model for how to create this program in a jobs bill.

“Oregon has been leading the nation in developing these types of program and has a truly innovative program up and running that shows how state and local loan programs make it affordable for families and building owners to make their homes and businesses more energy efficient.

“President Obama has it right – our focus right now has to be on creating jobs. All the economic indicators in the world don’t mean a thing to families that, more than a year after this recession began, are still struggling with the loss of a job. By investing in energy-efficient upgrades for our homes and businesses, we can help those families by providing paychecks and lowering energy costs.”

Rebates for homeowners should be large, by the way, something to the tune of a maximum $3000 - 5000. Improvements can be expensive. The rebate has to be large enough to entice homeowners to seek it.

Provisions, or at least some guidance to homeowners, should be included in the legislation to limit profiteering by contractors, distributors and retailers.

A rebate would be better than a tax deduction or a tax credit in that the homeowner could be reimbursed soon after the efficiency improvement was made, instead of waiting for the next tax filing period to be reimbursed.