New rebate programs provide incentives for home energy efficiency
When talking about sectors of the economy hit hard during the recession, it’s hard to compete with construction. According to the latest job report put out by the U.S. Labor Department, construction unemployment remains around 20.1 percent, or 1.8 million people still looking for work. No matter how you spin it, that’s a lot of people.
Last week, the Green Careers Partnership held a workshop at Cabrillo College aimed at helping Santa Cruz contractors move out of that figure and into the emerging economy of energy efficiency retrofitting for homes. Around 60 contractors sat in attendance at the event, which featured presentations highlighting new rebate programs for green home retrofitting, useful credentials and software for the green home sector, and attempts to create a network of green-minded builders.
One of the rebate programs, CalifornaFIRST, is a state Property Assessed Financing Program (PACE) coordinated by Santa Cruz’s own nonprofit Ecology Action which would allow municipalities to issues bonds, and loan the proceeds to property owners for projects like installing solar panels or insulating windows. The debt would be repaid through annual property tax assessments that pass from owner to owner, avoiding the common concern of 10- to 15-year commitments sometimes necessary for homeowners to recoup the cost of green retrofitting.
Contractor Jarrod Genevese of Pacific Energy Services, who attended the event, says it’s creative financing programs like CaliforniaFIRST that have been driving the construction industry when jobs are down. “In the last couple years out of all of this green stuff—solar, energy efficiency—some of the most creative ideas that have helped push it have been some of these new financing options people have been coming up with,” he says. “It’s pushed the industry faster than new technologies.”
CaliforniaFIRST hit a speed bump on its road to passage when the Federal Housing Finance Agency (FHFA) decided to halt the program by no longer issuing mortgages on properties with PACE loans because their “first-lien” status means mortgage holders take a back seat to PACE bondholders if the property ends up in foreclosure and they seek repayment.
Advocates of the program point out that PACE programs have been used by municipalities for 100 years (and are still used), when a city or county issues a bond for something like road improvements or schools. Projections also suggest that CaliforniaFIRST could produce upward of 20,000 jobs. The FHFA remains unmoved on the issue however, but with political outcries heard from local governments to the White House along with a suit filed by Attorney General Jerry Brown against Fannie Mae and Freddie Mac, proponents of the measure are hopeful.
The other program addressed during the workshop, HomeStar, is a $6 billion federal rebate program designed to encourage investment in energy-efficient appliances, insulation and whole-home energy efficiency retrofits. Through the program, homeowners could be eligible for between $1,500 and $8,000 in federal rebates (although no more than half project cost) if they qualify after a home energy inspection. The program has already passed in the House of Representatives, but is still awaiting a vote in the Senate.
Analysis by ICF International, a global consultancy firm, projects that the program will pay for itself in eight years through $2.6 billion lower in federal unemployment costs and $0.5 billion per year in federal tax revenue.
Some have complained, however, including some of those in attendance at the workshop, that the program has a fundamental flaw in requiring contractors to absorb all of the cost upfront and then apply for reimbursement which could take up to 30 days to receive, essentially making the contractors a bank for the interim.
Additional concerns have been raised over the accreditation process the program would require. To perform certain appraisals and comprehensive retrofitting under the program, contractors would have to be certified by the Building Performance Institute (BPI), a small regional organization headquartered in New York. According to BPI’s own website, 92 percent of BPI-accredited contractors are located in only two states, New York and New Jersey.
This has led certain unions, like the Air Conditioning Contractors of America, to remain in opposition to the bill unless those concerns can be addressed in the final version.
Beyond rebate programs, the workshop also highlighted the Cabrillo College Construction and Energy Management Program as a resource for both contractors to find qualified employees, as well as a resource to continue their own training and accreditation.
Why it Matters
When it comes to greenhouse gases, global warming and CO2 emissions, cars tend to be the first thing that comes to mind. From the gas station to the exhaust pipe, the whole process is pretty easy to see. But what about the indirect GHG emissions put out for heating and powering our homes?
While cars make up 28 percent of total CO2 emissions in the United States (according to the fifth climate action report put out by the U.S. Energy Department), residential homes account for 21 percent of CO2 emissions and commercial buildings account for another 18 percent. That means that while significant strides are being made in the transportation sector with the increase of hybrid cars and release of fully electric models like the Nissan Leaf and Chevy Volt at the end of the year, major improvements have yet to be made in an area which represents nearly 40 percent of CO2 emissions.
Additionally, while gas-saving and gas-free vehicles are great investments for the environment, like any car purchase they aren’t great investments for future returns. Green home retrofitting, on the other hand, saves cost in energy bills while simultaneously adding to the overall value of the home.
In the end, however, whether green retrofitted or not, a great deal of energy efficiency (or inefficiency) can be determined by habits in the home. Aaron Garfinkel, owner of green consulting and construction company Green Power, says that homeowners need to recognize the role their personal habits play in their energy use and, if they’re serious about reducing energy use, make deliberate efforts to reform some bad habits as well.
“A big factor in energy consumption and conservation is how we interact in our homes—our behavior is huge,” says Garfinkel. “A lot of people do energy upgrades on their home and then they think they can leave lights on, and they’re surprised when their bill is big. You have to look at how are you living. You can do huge reductions in energy just by how you behave in your home. It’s really important and that’s something people don’t understand.”