Bill creates jobs and cuts energy costs for homes

Bipartisan energy legislation, reported from the Committee on Energy and Natural Resources last year, is one source of solid proposals for creating clean energy jobs for future economic growth. I have been glad to work with Sen. Lisa Murkowski (R-Alaska) and both Democrats and Republicans on the energy committee on those proposals. There are also important improvements we can make to our tax policies to promote investment in forward-leaning, job-creating energy technologies. Sen. Olympia Snowe (R-Maine) and I have introduced a number of bills along these lines that I hope receive attention as the year unfolds.

A particularly attractive focus for energy job-creation efforts is a proposal that was part of the bipartisan energy bill and that has since been developed in greater detail by a coalition of leaders in the construction industry, experts on energy efficiency, and clean technology advocates. This proposal, known as “Home Star,” creates jobs by making our homes more energy efficient.

Buildings loom large in our national energy, climate, and economic policies for several reasons. The building sector is an important source of damaging greenhouse gas emissions. Within the building sector, two-thirds of those emissions are associated with residential buildings. Study after study has shown that building energy efficiency improvements are among the most cost-effective ways to reduce greenhouse gas emissions, saving consumers money in very short order. The same studies also show that these savings often are not realized because of market imperfections and the lack of incentives to help homeowners get started. Finally, construction jobs in the building sector are a key engine of economic activity.

At a time when homebuilders and contractors across our nation are struggling to make ends meet, and when homeowners are finding it hard to keep up with the rising costs of energy, the Home Star proposal can help both, by putting contractors to work providing much needed energy efficiency renovations. 

Proposed legislation that expands on the building efficiency provisions of the bipartisan energy bill and creates a Home Star program would establish that program in two overlapping phases. The first phase would consist of a “cookbook” of specific actions that can be undertaken quickly in the near term, using existing efficiency measures in the marketplace. The second phase would take a more comprehensive “whole building” approach to incentivizing energy efficiency, and would replace the first phase after one year.

Under the first, cookbook phase of the program, known as the “Silver Star Home Energy Retrofit Program,” homeowners would receive incentives for specific energy-saving investments.  Examples of qualifying investments would be window replacements, door replacements, attic or wall insulation, and furnace replacement. The size of the incentive would vary from $125 to $1,500 per measure implemented, with a limit for any one residence of either 50 percent of total improvement costs or $3,000, whichever was less. Because this phase of the program would work off a list of specific measures and appliances, it would be fairly easy to set up and administer quickly.

Under the second, more comprehensive phase of the program, known as the “Gold Star Home Energy Retrofit Program,” homeowners would take a more performance-oriented approach to improving their residence’s energy efficiency. A qualified contractor would conduct before-and-after analyses of the residence’s energy efficiency, and if its efficiency improved by 20 percent, the homeowner would get an incentive of either 50 percent of the total improvement costs or $3,000, whichever was less. For higher levels of efficiency improvement, the homeowner would get a higher incentive, up to $8,000.

Both the Silver Star and the Gold Star programs require that contractors be licensed, insured, and accredited according to industry standards, and provide for third-party quality assurance to detect and prevent fraud. Both programs also simplify matters for homeowners by allowing them to receive their rebates through the contractor, if they wish, thereby cutting down on paperwork and delay. At the option of a state, these programs can be administered by state agencies in concert with their existing building energy efficiency initiatives. Low-cost financing options to help with any upfront costs to homeowners are also included.

Home Star is a comprehensive and compelling proposal to address one of the most important opportunities we have to cut both greenhouse gases and consumer energy costs, while boosting private sector employment and demand for durable goods. As Congress considers additional ways to shore up our economic recovery and to accelerate new hiring, I hope this proposal’s broad impact and support help it to become law.

Bingaman chairs the Senate Energy and Natural Resources Committee.