Had there not been an economic meltdown of the present order of magnitude, it can be safely assumed that Congress would not be rushing to put the finishing touches on a stimulus package for the new president to sign post haste. Healthcare, income taxes and foreign policy issues would have all have taken precedence over domestic government spending plans.
But the economy is suffering a setback — a major banking and credit crisis — and, these days, spending $800 billion of taxpayer money in order to jump-start the economy and to hopefully create thousands of jobs is not only acceptable but is now fully expected to be enacted into law by the middle of next month.
In additions to billions in spending on transportation and other public infrastructure projects that are “shovel ready,” the package is also likely to include spending on housing and renovation.
All manner of tax credits and lending programs on purchases of new and existing homes are being drawn up to help eliminate the growing backlog of unsold homes. (And because remodeling activity is triggered in part by the sale of existing homes, this, in and of itself, would be welcome news to remodelers.) In addition, there is now a growing chorus among housing, energy and environmental officials, as well as among conservation groups, namely the 31-year-old Alliance to Save Energy, that significant funds for home weatherization and home energy retrofits will also be included in the final stimulus plan.
“Hopefully the government will use this unique opportunity to make it a cleaner, greener world,” said the Alliance to Save Energy’s Brian Castelli, an executive vice president with the organization. “Congress should fund home energy retrofits. It is a real opportunity.”
Like the overall stimulus package the dollars being considered for home improvement are large.
According to Castelli, current drafts of the stimulus package include $2.8 billion to be administered jointly by home-efficiency experts within the Environmental Protection Agency and the Department of Energy — namely the Home Performance with Energy Star program. That program currently supports 27 state and local programs to perform energy retrofits on homes. Remodelers may also benefit through direct funding of energy retrofits of state and local government buildings. Approximately $4 billion has been earmarked for energy-efficiency retrofits of those types of facilities, says Castelli. An additional $3 billion will likely be set aside for school energy retrofits.
Lastly, a long-standing Department of Energy program to provide weatherization funds for low-income households is expected to be vastly expanded under current drafts of the plan. This past fall, Congress added $250 million to augment the current budget of this program. They expect it would create 8,000 private sectors jobs. Under the stimulus package, an additional $2 billion is being considered, with a goal of weatherizing 1 million U.S. homes annually, up from the current rate of 140,000. If sustained, it is estimated that the additional weatherization funding would create an 78,000 new home improvement related “green collar” jobs across the U.S.
All told, stimulus package funding for energy retrofits of homes, schools and government buildings could be as much as $11.7 billion — a huge figure that some argue would transform the small but growing universe of building science and building envelope specialists.
Among those who see the potential for the equivalent of a “moon launch” for home energy retrofits is David Lee, a branch chief for the Environmental Protection Agency, who runs the Energy Star residential branch of the department, which runs a program called Home Performance with Energy Star.
“It is ambitious to envision a time when perhaps as many as 10 million homes annually will receive energy retrofits,” says Lee, “but the growth rate that we’ve seen in building envelope certifications [through the Building Performance Institute] indicates there is a lot of interest among contractors. Also, given the amount of money being discussed for the stimulus package, the financial incentive would certainly give it a boost.”
But money is only part of the story, says Lee. A dramatic rise in concern among average people about climate change, coupled with a better understanding of the home-comfort benefits of tighter, more efficient homes among consumers, also supports the potential for the 10 million retrofit homes figure to eventually occur.
“It is just going to make most homes a lot more comfortable and a lot of people just don’t understand that yet,” adds Lee. “When people think about home energy retrofits, they think about sacrifice and conservation, but they don’t think about the improvement in comfort level. And that is the last piece of the message we are talking about.”
The home comfort message is one that is also fully embraced by the Malta, N.Y.-based Building Performance Institute, which provides a range of home-energy certifications to trade contractors, general contractors and remodelers around the country. Last year the group was responsible for overseeing the accreditation of over 1,800 professional certifications. In 2009, through a huge increase in the number of registered training partners, certifications are expected to increase dramatically to 12,000, says the group’s chief executive, Larry Zarker.
“Here is why this works,” explains Zarker. “Contractors, through apprenticeship or experience, end up entering a trade and learn one or two skills. They become good at that skill. And, in the end, what you have is a collection of trades in the home that know their skills pretty well, but don’t know very well how different products interact with the rest of the house. But the house must act as a system or you end up with problems with the performance of the home and the homeowner generally pays for that. This will show up as higher utility bills, durability problems that could lead to moisture or other kinds of issues. We offer a real integrating function. We train contractors who learn how to think of the house as a system.”
The Business Opportunity
Many remodelers and contractors have profitably added home-performance audits along with professionally installed home-performance solutions to their businesses. They have either received training and certification or they have retained an outside home-performance firm to test their remodeled homes before and after each project. In Mountain View, Calif., Spectrum Fine Homes, a remodeling firm run by Susan and Bob Davis, CR, CGBP, has conducted home energy audits on all of its major renovation projects over the last five years. The Davises and key managers simply made the decision to operate a very green company and the firm has never looked back. Aiding them in the process is an outside auditing firm, Sustainable Spaces. Using duct blasters, blower door tests, and thermal imaging cameras among other energy-auditing tools, Sustainable Spaces offers a full report on a home’s deficiencies prior to the creation of any design solution. (For a full look at the Spectrum Fine Homes energy audit approach, see the December 2007 issue of Qualified Remodeler or go to www.qualifiedremodeler.com and find the article in our archives.) In the Pacific Northwest, an iconic firm in the remodeling industry, the Neil Kelly Company, with a 60-year history in high-end, discretionary remodeling, has adopted a similar policy over the past year.
Coming at it from the exterior contracting background, Michael Lotesto of Performance Exteriors has built a new company in suburban Chicago organized around the discipline of energy audits. Instead of selling windows, roofing and siding as a home improvement, Lotesto, equipped with his BPI training, offers paid audits that lead to opportunities to provide professional home improvement solutions. Among the many upsides says Lotesto, is being seen as a true professional who offers a scientific solution, enjoying a higher level of credibility with customers, and being paid in the range of $500 for a first consultation at a home.
In Chester, N.J., former NAHBR chairman Bill Asdal, CGR, became a certified building analyst through BPI several years ago and since then has become a strong advocate not only for the business merits of home energy audits, but also for the larger possibilities offered to the remodeling industry.
“Testing houses gives us the proof that we design and build our solutions correctly, that we do our jobs well,” notes Asdal. “Remodelers need to be held accountable for the performance we are selling, and testing is the best way to do it.”
Among the homes that Asdal has remodeled in recent years, two are of note. His company, Asdal Builders, demonstrated that a drafty Victorian could be made to consume almost zero energy when solar arrays were added to a solid energy efficient envelope. More recently, he teamed with a remodeler in Pittsburgh to remodel a typical worker cottage and reduce its energy costs by 30 percent annually. By using the results from that house, he has constructed a financial argument that investing in “load reduction” can actually beat a 10-year, stock market average (before its recent precipitous decline) in terms of return on investment. “We’ve got to get people looking past the higher first-cost prices that are required to make homes highly efficient. We have to help them see the longer term gains both in energy savings as well as comfort.”
From a societal standpoint, the potential benefits of increased home performance are huge, giving credence to the level of funding anticipated to be offered within the new administration’s stimulus package. According to the EPA, if every homeowner reduced their home’s energy consumption by 20 percent, it would save over $20 billion annually and would cut 200 billion lbs. of CO2 emissions each year.
“Of course you’d have to get all of the 128 million homes in the country to go along with that 20 percent reduction to make that change,” says EPA’s David Lee, “but it shows how dramatic the benefits could be. Right now, the least-cost option out there to reduce the nation’s energy costs is through energy conservation and efficiency. Before you put solar on a home, or before a local utility builds a nuclear power plant or a clean-burning coal plant, it is wise for us as a country to invest in energy efficiency. For that reason, we feel that the Home Performance with Energy Star program, among other programs pushing greater efficiency, will become very popular as we try to reduce our dependence on foreign oil and address the problem of climate change.
“And we’d talking about a whole new economy.”
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