by Steven Chu DOE-Sec

I've always been a bit of an energy efficiency nut.

I've made it my mission to cut the utility bills at every home we've owned. Long before I learned about the risks of climate change, I was fanatical about energy efficiency because I'm cheap.

Whenever my wife and I move into a new home, I check the attic for adequate insulation. I look for leaks around doors and windows and install a programmable thermostat if needed. In our latest home, I've also insulated our water pipes with inexpensive foam from our local hardware store and painted mastic sealant on the seams of the air ducts. When our hot water heater needed replacement, we installed a tank-less water heater which decreased our summer-time gas use by 50%. In the summer, we found that setting the thermostat at 77 - 78 degrees and a gentle breeze from a fan was all that is required to be comfortable.

So far, we are on track to cut our utility bills by about half compared to the previous owner, but we are doing more. Our home has two large skylights that funnel too much heat out in the winter and let too much heat in the summer. We intend to replace these older windows with modern widows with five times the efficiency.

Taking these steps is called "weatherization." I would rather call it "saving money by saving energy." Over the next several years, we want to help millions of American families seize the same opportunity to cut their utility bills by making their homes and appliances more energy efficient while increasing comfort.

We are making a major down payment on this effort through the President's economic recovery plan.

First, the Recovery Act expanded tax credits for energy efficiency upgrades to your home. If you purchase and install certain energy-efficient windows, insulation, doors, roofs, or heating and cooling equipment, you can receive a tax credit for 30% of the cost, up to $1,500. For example, if insulating your attic costs around $1,600, you'll receive a $480 tax credit, and you could save up to $200 on your utility bill each year.

Second, we are launching an innovative new effort called "Retrofit Ramp Up" that will simplify and reduce the cost of home retrofits by funding pioneering programs that reach whole neighborhoods and towns. If we can energy audit and retrofit a reasonable fraction of the homes in any given residential block, the cost will be greatly reduced. Programs such as these will decrease barriers to saving money: inconvenience, inertia, and inadequate information. We want to make home energy efficiency upgrades irresistible and a social norm for homeowners.

This effort could offer homeowners innovative ways to finance the upfront investments they can't afford on their own. For example, homeowners might receive a loan for an energy improvement and pay back the principal and interest over time via an assessment on their property tax bill. The homeowners might pay an extra $400 per year on their property tax bill but save $500 a year on their utility bill. Since the financing would be attached to the property tax bill, both the savings and the loan payments stay with the house if the owners decide to sell.

Finally, for low-income families who are hit hardest by high utility bills, the Recovery Act provides $5 billion for home weatherization. This is the largest single investment in home energy efficiency in U.S history. This program is creating jobs now, putting money back in the pockets of hardworking Americans, reducing our environmental footprint, and making these homes more livable. However, some people - including me - have been frustrated that the program started off more slowly than we'd hoped.

It took a few months for states to develop their plans and for the Energy Department to ensure those plans met the highest standards of accountability. We also used this time to work with the Labor Department to establish standards that guarantee these jobs pay a fair wage. States and their local weatherization agencies also began training this new workforce and buying millions of dollars in necessary equipment and materials, like caulk guns, insulation blowers, and service vehicles. We are taking the care and time necessary to make sure these taxpayer dollars are well spent.

Those purchases are creating jobs. A good example is an insulation machine manufacturer called Krendl in Delphos, Ohio. Because of Recovery Act-driven purchases, Krendl has expanded its workforce by 30 percent, and one of Krendl's distributors, Applied Energy Products, Inc., increased its staff by almost 60 percent.

Here's more good news:

• All 50 states have received 100% of their Recovery Act weatherization funding and have begun to double and triple their home energy efficiency efforts. Workers are being hired, homes are being improved, and families are being helped.
• In September, we estimate we weatherized 15,000 - 20,000 homes - the fastest pace in the 30 year history of the Weatherization Assistance Program. We expect to be weatherizing 20,000 to 30,000 homes per month soon.
• This effort has already created or saved thousands of jobs, and the pace of hiring is accelerating. The Department of Energy and our partners have an aggressive training and technical assistance program to continue to invest in green workforce development.

We're training a workforce and building a home energy efficiency industry that will be a crucial part of America's new, clean energy economy. As states, utilities and private companies increasingly pursue home energy efficiency - in part because of the innovative incentive programs I described earlier - we will have the capacity to help millions of Americans lower their utility bills.

Energy efficiency is simply good economics. It will save you money. It will create jobs. It is a way for you to personally decrease your carbon emissions and help save our planet.

The *Recovery Through Retrofit *Report builds on investments made in the American Recovery and Reinvestment Act of 2009 (Recovery Act) to expand the home energy efficiency and retrofit market. Home retrofits can potentially help people earn money, as home retrofit workers, while also helping them save money, by lowering their utility bills. By encouraging nationwide weatherization of homes, workers of all skill levels will be trained, engaged, and will participate in ramping up a national home retrofit market.

*Support Municipal Energy Financing *
Property tax or municipal energy financing allows the costs of retrofits to be added to a homeowner’s property tax bill, with monthly payments generally lower than utility bill savings. This arrangement attaches the costs of the energy retrofit to the property, not the individual, eliminating uncertainty about Recovery Through Retrofit recovering the cost of the improvements if the property is sold. Federal Departments and Agencies will work in partnership with state and local governments to establish standardized underwriting criteria and safeguards to protect consumers and minimize financial risks to the homeowners and mortgage lenders.

*Expand State Revolving Loan Funds *
Expanding state revolving loan funds from 16 states to all 50 states will leverage private capital and achieve economies of scale necessary to produce consistent and affordable loan products.

Support Municipal Energy Financing
The Property Assessed Clean Energy (PACE) financing programs enable the costs for energy efficiency retrofits to be added to an owner’s property tax bill as part of a municipal property tax assessment, which takes the same priority as traditional property tax liens and assessments….DOE will be funding model PACE projects, which will incorporate the new principles for PACE program design.

Expand State Revolving Loan Funds
Revolving Loan Funds for energy efficiency retrofits in homes already exist in 16 states.

Improve Energy Efficient Mortgages
Energy Efficient Mortgages (EEMs) enable home buyers and homeowners refinancing their properties to add energy efficiency upgrades and improvements to their properties as part of the underlying mortgage financing transaction

Develop Consistent Workforce Certifications and Training Standards
Advance a nationally recognized worker certification standard for comprehensive training that provides evidence that a worker is well qualified to properly complete efficiency and healthy home retrofits.

1. Identify an operations officer. Babylon appointed a DPW defcom who had supervised 100 workers, was a licensed master electrician and union member who had worked as a contractor and understood the nature and needs of homeowners. Most municipalities are likely to have qualified staff who are eager to take advantage of the opportunities presented by the evolving energy efficiency sector.

2. Meet with contractors and workforce reps. Babylon requires BPI certification and Suffolk licensing for participating contractors. Feedback from the contractors helped set the $250 audit fee (which is subtracted from the final cost of the job). Unions were privy to the process. The Power Authority did an effective job of training the contractor community for this work. With the GreenHomes pilot fulfilling its target, other substantial contractors are acquiring the accreditation to qualify to work in the program.

3. Program uniformity. GreenHomes has been a demonstrative success through the pilot stage. LIPA has suggested that it would like towns, in developing their own programs, to strive for as much uniformity as they are able. So, for example, Babylon has generally strived to cap the total work at $12,000, but makes exceptions. Babylon has, however, limited the payback period to ten years. Each town will want to determine the jurisdictional confines of their pilot, i.e. residential. A functional wheel has been invented here so most municipalities might only need to modify the tire pressure.

4. Code conformity. Babylon’s town council passed a resolution to expand the definition of solid waste to include energy waste by dint of its carbon component in order to access the town’s solid waste reserve to finance the programs revolving fund. New York has affirmed this principle legislatively and now any municipality in the state, that does not have one, can create a waste district to administer a GreenHomes program. Criteria for contractor qualification, i.e. BPI certification and county license, were established. Furthermore, DOE has stipulated that to qualify for the competitive “Retrofit” grant, participants must satisfy must have “a building energy code (or codes) for residential buildings that meets or exceeds the most recently published International Energy Conservation Code, or achieves equivalent or greater energy savings.” 10 of 13 towns on Long Island qualify owing to the Energy Star standards for new home construction. In addition, DOE requires “a building energy code (or codes) for commercial buildings that meets or exceeds the most recently published ANSI/ASHRAE/IESNA Standard 90.1, or achieves equivalent or greater energy savings.” Babylon’s required LEED certification for commercial construction makes it compliant.

5. ID a billing system. Babylon is using it existing software-based, solid waste billing system. After the town pays the contractor for the completed work, the homeowner’s obligation is assigned as a monthly benefit assessment. These payments are generally structured to be slightly less than the monthly savings realized from reduced energy consumption. Should the homeowner move before the term of the obligation, the balance is assigned to the property then assumed by the next homeowner. Should the homeowner be delinquent, the outstanding amount is assigned to the property tax.

6. Retain or repurpose support staff. Second hire should probably be an FTE to do customer intake, info processing and contractor work orders. Start w/ a PTE, perhaps from the communications department, to handle marketing and outreach. Once the program is up and running and the operations manager is going full-tilt, the hiring of a field lieutenant to do M&V, contractor and homeowner interface, plus data-basing program performance would be in order. Expand when and where needed. Babylon took full advantage of seasonals at parks & events in promoting GreenHomes.

7. Stake out space and equipment. Babylon has large dedicated room for staff, customer walk-ins and contractor contact. There is a dedicated Smart Car festooned with Green Homes logos; all public safety vehicles are comparably appointed. Babylon first equipped M&V with a camera and, subsequently, added blower door equipment and an infrared camera (these items as well as administrative expenses can be covered by town EECBG formula grants).

8. Set up web-site. www.TheBabylonProject.org web-site was built by our dep. communications director using SquareSpace software. At this site as well as www.ligreenhomes.com, there are home page videos that give potential participants a sense of the process. Babylon is allocating a portion of its formula grant to develop robust software that will wake up homeowners and tuck them in at the conclusion of work all while processing the work scope and structuring the financing. We would hope to share the results with other programs as they go to scale.

9. Stir & add homeowners.