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HOME STAR: Putting Americans Back to Work
Posted on 26. Feb, 2010 by GMS Editor in Featured, Newsflash, ShowOnLatestPanel, Uncategorized
By Bracken Hendricks, Tom Kenworthy | February 23, 2010
As the nation struggles to recover from one of the worst economic recessions in decades, unemployment has recently shown some marginal improvement, falling below 10 percent in January. But for workers in the construction and construction-related manufacturing sectors, there is little relief as jobless rates remain at near-Depression levels.
Fortunately, help is on the horizon. This week a bill establishing a HOME STAR program of consumer rebates for home energy efficiency retrofits will be introduced in the Senate thanks to the leadership of Sens. Mark Warner (D-VA) and Jeff Bingaman (D-NM), among others. Concerned members of Congress, with the Obama administration’s support, have crafted an incentive program to make millions of U.S. homes more energy efficient, swiftly create 168,000 jobs in construction and manufacturing among other industries, save homeowners nearly $10 billion over a decade through lower energy costs, and make a dent in global warming pollution.
The proposal for a $6 billion HOME STAR program enjoys broad and bipartisan support. It is backed by the President’s Economic Recovery Advisory Board and is part of a jobs agenda endorsed by some Senate Democratic leaders. A large and broad coalition including major corporations, organized labor, and energy nonprofits supports the initiative as well. In President Barack Obama’s State of the Union address he said that rebates for Americans who retrofit their homes should be part of a clean-energy agenda. “We should put more Americans to work building clean-energy facilities, and give rebates to Americans who make their homes more energy efficient, which supports clean-energy jobs,” he said. The Senate will soon consider jobs legislation and HOME STAR should be a key component.
HOME STAR, sometimes called “cash for caulkers,” is a proposal that makes sense. It makes economic sense because it can provide a quick employment stimulus putting 168,000 people to work—the overwhelming majority of them in jobs that can’t be outsourced overseas. It makes sense for homeowners who will be able to afford home improvements that will pay real dollar dividends for many years by reducing their energy bills 20 percent or more forever. It makes sense for businesses who will see demand for their products increase. And it makes sense for a more secure energy future since increasing the number of homes with energy efficient retrofits from 200,000 a year to 3 million a year will cut global warming pollution by the equivalent of taking 615,000 cars off the road or decommissioning four 300-megawatt power plants.
As important as these energy benefits are, however, HOME STAR is clearly a job creator and the right medicine for the economy.
Consumer incentives
The program gives homeowners a choice of incentives: the SILVER STAR and GOLD STAR paths.
The SILVER STAR incentive provides rebates for purchasing and properly installing specific energy-saving equipment such as furnaces and water heaters, or changes to a building’s envelope such as insulation and duct sealing. Rebate amounts are up to $1,500 per qualified installed measure, capped at 50 percent of project costs or $3,000—whichever is less.
The GOLD STAR incentive goes a step further and rewards whole-home or office building retrofits. This performance?based incentive is based on predicted energy savings determined by a thorough energy audit performed before the work begins. The auditor tests the home’s energy performance using proven building science methods, designs a customized retrofit plan in consultation with the homeowner, and calculates the energy savings that will result from the recommended measures. Homeowners can receive $3,000 for modeled savings of 20 percent, plus $1,500 for each additional 5 percent of modeled energy savings, with total incentives of up to $8,000, not to exceed 50 percent of total project costs. This will encourage homeowners to invest in the most cost-effective technologies, which are often the simplest and most labor-intensive investments.
Economic benefits
HOME STAR will create 168,000 jobs according to independent analysis by Climate Works using respected economic models from REMI and McKinsey & Co. Those jobs will be heavily concentrated in the hard-hit construction and manufacturing sectors of the U.S. economy and will benefit every state and both urban and rural communities.
The program will help create long-term construction industry careers by increasing demand for home energy retrofits roughly 15 times, rising from current rates of 200,000 homes a year to close to 3 million retrofits annually. It will also provide much-needed help to the retail sector where overall jobs have fallen 7.5 percent since December 2007 but 10.4 percent for building materials and garden supply stores. Jobs in the wholesale sector have declined 22.5 percent for construction supplies compared to 8.1 percent overall.
The HOME STAR program dedicates $200 million to increase consumer access to financing, which further boosts job creation by leveraging additional private capital investments, and helps homeowners overcome upfront cost barriers to paying for these energy-saving home improvements.
What’s more, HOME STAR investments are cost effective, creating an additional economic benefit by saving homeowners as much as $9.4 billion over 10 years. HOME STAR will also affordably reduce carbon dioxide emissions by 4 million tons per year, or 40 million tons by 2020. That helps the economy by reducing our vulnerability to energy price shocks and getting a head start on driving down the production of greenhouse gases—changes we know we need to make anyway.
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