Home Star: 5 answers about 'Cash for Caulkers'

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The Home Star program — or "Cash for Caulkers" as some have dubbed it — could provide a big boost to home energy efficiency through billions in tax credits and other incentives over two years.

January 01, 2010

The Home Star program — or "Cash for Caulkers" as some have dubbed it — could provide a big boost to home energy efficiency through billions in tax credits and other incentives over two years.

President Obama came out in favor of the program in December as part of the administration's plan to drive job creation, but the final approval has to come from Congress. The exact size of the program is uncertain, but Efficiency First, a trade association started in early 2009 for home energy-efficiency contractors that helped craft Home Star, put the price tag at about $23 billion.

Here are five key things remodelers need to know about it.

1. WHAT WOULD THE MONEY GO FOR?

Here's how Efficiency First breaks it down:

  • $6 billion in funding for homeowner incentives for those who do at least two significant weatherization projects from a list of 10 eligible project types such as air sealing or insulation. Completing two projects would result in up to $2,000 in subsidies and completing four could earn $3,500, capped at 50 percent of project cost.
  • $12 billion for homeowners who undertake a weatherization project that reduces energy consumption by at least 20 percent. A 20 percent reduction would earn a $4,000 subsidy and each additional 5 percent would result in another $1,500 subsidy, with funding capped at 50 percent of project cost.
  • $2 billion for program administration, including audits of some projects to confirm they're meeting the energy improvements
  • $3 billion in incentives to encourage retailers to support the program to build awareness and educate consumers.

2. WHAT'S THE POTENTIAL IMPACT?

Efficiency First says the program would result in 5.9 million residential energy retrofits and create more than 500,000 jobs new jobs in construction and related industries.

"Unemployment in the construction industry is double the rest of the economy," says Matt Golden, founding president of Efficiency First. "Considering the underreporting in this industry, it's probably really up in the 20s. These really are smart jobs, because they're long-term."

NAHB estimates that 11,000 jobs; $527 million in wages and salaries; and $300 million in business income are generated by every $1 billion in new remodeling and home improvement activity.

"That's a huge impact just in the short run. And in the long run, the energy savings for participating homeowners can be quite significant," says NAHB Chairman Joe Robson.

3. WHAT'S BEHIND THE PROPOSAL?

Last fall, the Obama administration started looking for job-creation programs as part of further economic stimulus plans. John Doerr, a Silicon Valley venture capitalist who sits on a board of outside economic advisers to the President, worked with Efficiency First, the Building Performance Institute and other groups to bring the program to the administration.

"The administration is concerned that we're entering into a recovery without jobs and the numbers seem to bear that out," says Building Performance Institute CEO Larry Zarker.

4. DOES THE PROPOSAL COMPETE WITH THE AMERICAN CLEAN ENERGY AND SECURITY ACT?

Proponents say it's designed to complement the Retrofit for Energy and Environmental Performance (REEP) program that was rolled into the legislation last year, offering a more immediate benefit.

"The way that legislation would work, should it pass, is that the cap-and-trade provisions would ultimately pay for the conservation provisions, so there would be a couple of years before money goes out," Zarker says. "This would create what we call the 'bridge to REEP' — a near-term solution that would spark demand for home energy retrofits."

5. WHAT'S THE LIKELIHOOD OF HOME STAR GETTING PASSED?

Golden and Zarker believe the chances are good Home Star or something similar will make its way out of Washington.

"There's an awful lot of momentum behind it right now and Congress is looking at it pretty closely," Golden says. There has also been more bipartisan support for energy efficiency programs than the climate change provisions included in the American Clean Energy and Security Act, making this an easier sell in Congress, Zarker says.

"We're pretty encouraged that the White House is seriously interested in taking this idea out and getting legislative support for it in the near term," he says.

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