The Promise of the Home Star Cash for Caulkers Program--Our View

There is plenty of evidence to suggest that our buildings have to become more efficient not only to reduce costs for homeowners, but also to reduce our dependence on oil and electricity. The proposed Home Star program, or our preferred name, Cash for Caulkers, currently being reviewed by the Obama Administration, feels very much like a move in the right direction, so long as it keeps an eye on the long term and holds on to its teeth.

Few details about the program specifics are available, but the core elements of what has been disclosed are right on track.

First, the program rewards actual energy use reductions, and honors efforts to dig deeper to attain results. We have repeatedly argued that homeowners benefit from having a long-term plan as they undertake home energy efficiency improvements. This plan should allow for ultimately reaching deep energy reductions, a goal which may take years to achieve but should not be obfuscated by steps taken in the interim. Under this program, homeowners attaining a 20% reduction in their home energy use will be entitled to a $4,000 subsidy. They will also be able to earn an additional $1,500 subsidy for each 5 percent reduction after that, so long as that amount does not equal more than half of the home owner's investment.

Second, the program focuses $2 billion for home energy audits and the job creation that will result from that investment. The architects of the program clearly understand house as a system and appreciate the interconnected nature of building systems. Home energy audits used as benchmarks in this program will ensure that houses benefit not only from reduced utility bills but also from improvements in indoor air quality and durability, because those issues will be addressed by a certified home energy auditor.

The subsidies proposed are attractive, for sure, but still don't address the full costs of energy retrofits. We'd like to see the program integrated with the other creative financing mechanisms that favor consumers. Property Assessed Clean Energy, or PACE, the system in which efficiency and renewables financing is tied to the property tax, is spreading across the country. California led the way with AB 811 and the New York State Legislature approved a program with similar elements on Monday. The PACE programs work by allowing property owners to pay for the improvements over 15-20 years through an increase in their annual property taxes.  The mortgage rate buy down concept of Architecture2030 is another equally clever approach that ties interest rates to the energy efficiency of the home, and has the potential to inject billions of dollars into the energy retrofit industry.

Finally, we've got to do a better job at communicating not just the need, but also the solution. As David Leonhardt recently pointed out in the New York Times, Cash for Caulkers has the potential to do more good than Cash for Clunkers, over the long haul. This is only true if homeowners have ready access to the information they need in order to begin retrofitting their homes. Homes are more complicated than cars, in part because there is not (thankfully) a builder's equivalent to the 1976 Chevy Nova. Even similar homes, if they are built in disparate regions of the country, will require far different kinds of work.

Cash for Caulkers' itemization of included weatherization projects is clearly a nod towards much needed simplification, though it is undoubtedly making many building science professionals uneasy. (Does an an air sealing package in Los Angeles really have the same value as in Minneapolis?) But simplicity is absolutely critical. In this economy, homeowners seek tangible evidence that their retrofits will pay off not only in the long term, but in the short term as well. Fortunately, they will. It is key that an element of this plan include bold education for homeowners about the many benefits of energy efficiency, from long-term cost savings to more comfortable and healthier homes right now. The repercussions of the decisions we make about our homes right now will outlive us.