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Oct302009

Weatherization: Saving Money by Saving Energy

Friday, October 30, 2009 at 5:18PM

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.

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