Show us the money: Cash for Caulkers poised to return - WalletPop asks, can it work?
byJan 6th 2010 12:00PM
So let's take a breath and ask some basic questions, such as whether such credits will work and what models around the country suggest alternative approaches?
In conversations with various ground-level groups, WalletPop came away with a variety of intriguing perspectives about the federal Homestar proposal, from frustrated homeowners and entrepreneurial municipalities, from measured energy consultants and curious insulation installers. Here is a sampling:
Matt Golden, founder of Recurve, a residential green home remodeling company in the San Francisco Bay Area, and national chairman for Efficiency First, a trade organization
Golden views Cash for Caulkers as a cornerstone of jobs stimulus, noting that one in five construction workers is out of work – one in four in his home state, California.
"We need demand-side incentives: money in the pocket of the homeowner," Golden said.
Golden has been directly involved in the Washington debates and he says plans under discussion call for a two-tiered approach: upfront rebates for installation ranging from insulation to heating and cooling systems, and performance-based incentives based on how much you improve your home's energy efficiency.
In the past, Golden said, solar installation has had a disproportionate advantage because of its 30% federal tax incentive. Extending similar – perhaps even enhanced – incentives to insulation, double-paned windows, efficient heating and cooling systems and, yes, caulk, would "level the playing field."
That leveling also pushes consumers toward American-made products, since nearly two thirds of solar panels are made in China, while 100% of most standard insulation is made in the United States.
Dorian Dale, energy director and sustainability officer, Town of Babylon, Long Island, NY
When Sen. Charles Schumer stumped for Cash for Caulkers in mid-December, he urged that the program be modeled after Babylon's Green Homes program.
The program, he told Newsday, "represents a win, win, win for homeowners ... for Long Island and for the country."
Babylon used a creative definition of solid waste – counting carbon as a solid – to essentially finance energy retrofits through its solid waste assessment, billing it monthly at 3% interest.
The program starts with a mandatory energy audit, which costs $250, that both allows homeowners to see where they can make the most difference and the city to assess how much carbon is saved through the eventual retrofit.
So far, 300 homes "have either retrofitted or are in the queue," Dale said, slightly above the 250 targeted. For next year, the optimistic projection is 1,200. In addition, the city is looking at ways to extend the offer to businesses, rewriting leases so that owner and tenants share the benefit from energy savings.
Greg Meyer, San Mateo, Calif. homeowner and community relations manager for Meriwest Credit Union
Meyer has watched the national debate with equal parts bemusement and skepticism. Meyer has already added insulation and double-paned windows to his two-bedroom, one-bath post-war home for $4,300. It helped reduce his winter energy bill to about $60 from $100 a month. (OK, granted it is a California winter.)
What he would like to see is a more robust rebate for solar, one that would make the estimated $16,500 investment worth his while.
"The federal rebate is on materials only, so it is minimal," he said. "I can't get a state rebate as I make only slightly more than the max. annual salary. Essentially, if you are not a low-income family, you can't get a rebate. But low-income families are not taking advantage of it."
In addition, Meyer has watched the local power company reduce the rate it pays solar customers who produce more electricity than they need and sell it back to the grid.
A longtime advocate for solar, who worked on financing for several affordable housing developments, Meyer considers it "a shame I cannot afford this technology."
But, short a heftier rebate, "I could better enhance the value of my home by spending the $16,500 on my kitchen!" he said.
Jeff Boone, president of NorthStar Comfort, Inc., a Witchita, Kan. insulation company
Boone's company was started in 1947 by his grandparents but, in recent years, he has offset lost new construction business by shifting more business to retrofitting existing homes. He noticed an uptick in the retrofit business when the federal tax credit for many energy efficiency upgrades rose from 10% to 30%. But the fact that it applies to materials, not labor, makes it overly complicated and less than persuasive for many customers.
Boone strongly believes that any retrofit should start with a thorough energy audit of a home, so he hopes that will be covered in the federal rebate program.
"Audits run anywhere from $100 to $500, depending upon how thorough the auditor is being asked to be, if he uses a camera, how many reports are wanted, etc.," he said. "It's like an annual checkup: you know you should get one, but you feel fine, so you skip it."
In addition, some sort of financing mechanism would help many homeowners.
"In the scale of things, insulation improvements are relatively cheap," Boone said. "That said, we are considering adding some sort of financing option to our operations to help people afford our services. Interestingly, banks have not been interested in helping us with this because the amount of money needed is too low.
Cheryl O'Connor, CEO Homebuilders Association of Northern California and consultant to the Sonoma County Energy Independence Program
In March 2009, Sonoma County launched a retrofit program for homes and businesses in which work is financed via a loan added to the property owners' tax bill, which transfers along with a property sale and is paid off over time.
Since then $24 million in requests have been approved for energy and water efficiency and renewable energy work.
So, for Sonoma residents, O'Connor sees a federal rebate as a little added incentive. Elsewhere, she sees it as invaluable.
"In Sonoma County, you can see the job growth – you can see it through the permits," O'Connor said. "It's generating jobs for contractors who have not had a lot of work recently. That's the same thing it can do all over the country.
One of the industry's mottos is "reduce, then produce" and O'Connor advocates that property owners do everything but solar first, so she agrees with the federal governments current push to include upgrades other than solar.
"Solar panels are sexier; it's the first thing people want to do," she said. "But if your home is leaking like crazy, it's going right out the window."