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Summary:

For the thousands of contractors and state and local agencies that have received funds under the Department of Energy’s Weatherization Assistance Program in the past, President Obama’s stimulus bill, which calls for a massive $6.2 billion to weatherize low-income homes, was a little like winning the […]

For the thousands of contractors and state and local agencies that have received funds under the Department of Energy’s Weatherization Assistance Program in the past, President Obama’s stimulus bill, which calls for a massive $6.2 billion to weatherize low-income homes, was a little like winning the lottery. The DOE last year allocated just $227.2 million for the Weatherization Program, which was founded in 1976 and has so far helped around 6.2 million families’ homes become more energy efficient by upgrading insulation, heating and cooling systems, air filters and windows.

So the first reaction from the contractors and agencies, naturally, has been elation. As Geoff Chapin, CEO of eco-retrofit company Next Step Living, says, “We were heartened to hear that weatherization plays such a critical role in the stimulus package.” But like winning the lottery, that influx in funds — what the Obama administration calls “the largest weatherization program in history” — is so large that federal, state and local agencies are expected to find allocating them and conducting sufficient oversight around them a real challenge. The DOE and the state agencies will have about a month to allocate the funds and local agencies will have around 18 months to spend them. And industry insiders we’ve talked with (who don’t want to go on record criticizing the package) are very doubtful that the new funds will be dispersed in a smart and timely manner — state and local agencies, they say, just can’t ramp up fast enough.

The DOE, however, says it’s confident it can complete the task. Robert DeSoto, Weatherization Project Manager for the agency, said they’re “up to the challenge;” the funds, he said, will still be allocated in a similar manner as before, just with a couple of expected changes aimed at boosting the numbers of homes that would qualify, such as raising both the amount that can be spent per house (to $5,000 from $3,055) and the income level requirement of families. DeSoto said the real test will be getting the 900 local agencies to spend the funds on construction — which is always capital-intensive and slow-moving — within the allotted time frame. Chapin, as well, is concerned about how the agencies will spend the funds in a timely and effective manner.

While the path ahead is still unclear, the motivation behind President Obama’s decision to make weatherization one of the first aspects of his energy plan is not: It’s one of the most cost-effective ways to invest in energy efficiency. According to the DOE Weatherization Program, a $1 invested returns $1.65 in energy-related benefits, and at the same time leverages $1.54 in other resources from private funding, utilities, state funds, and other federal funds. A home that’s “weatherized” at a cost of several thousand dollars can save some $350 per year on energy bills, claims the Obama administration (that’s conservative, as the Weatherization program sites a number closer to $413).

For low-income families, such savings could be crucial. According to an Oak Ridge National Laboratory study, low-income families paid 17 percent of their annual income on energy, compared with the 4 percent spent by higher-income households.

Increasing home energy efficiency is also low-hanging fruit for the fight against climate change — the technology is widely available (insulation, more efficient building materials), unlike many forms of clean power generation that are still too expensive and still in the R&D phase. Residential homes accounted for 21 percent of all U.S. energy consumption in 2007, according to the Energy Information Administration.

So clearly a boost in the weatherization program is savvy, and ramping up the current funds to such a large extent, laudable. But perhaps more of the $6.2 billion should be put towards ensuring that the funds are being spent properly, or maybe the timeline should be relaxed to accommodate a slower ramp-up. At such a critical juncture in the fight against climate change, close attention needs to be paid as to where this money is going and how, exactly, it will be spent.

This article also appeared on Businesweek.com.

By Katie Fehrenbacher

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  1. [...] competition, though a nice idea, pales in comparison to the $6.2 billion to weatherize low-income homes that’s included in the house version of the U.S. stimulus bill. That cash, which needs to be [...]

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  2. Just wanted to note that while the term weatherization can refer to making a home or building more energy efficient, the term is primarily used to refer to increasing a structure’s ability to survive severe weather, also known as “hardening”.

    So one question not asked in the article is what proportion of weatherization funds will (or should) go towards weatherization in the more commonly understood sense, and what portion to improved efficiency?

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  3. [...] the focus on weatherization in the stimulus, but noted two concerns: How quickly the government can distribute these hundreds of billions of dollars, and how effectively industry can spend them. “It will be critical that the focus on [...]

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  4. I am a 66 year old white female retiree. I just had to have a new furnance installed. It cost over $5000, where is my help to pay for this. so far out of 800B I will be getting $250.00. this isn’t right

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  5. [...] Joe Biden and Energy Secretary Steven Chu today are allocating $8 billion dollars from the stimulus package for weatherization and energy efficiency upgrades to the states. Those funds, which are supposed to create 87,000 [...]

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  6. If the article above is correct, I am concerned that the weatherization program is to last only 18 months. Sure, lots of jobs for 18 months, then what? Lots of people out of jobs again. Why not make it all more managable and stretch it out for 4 – 6 years. That is what we do with wars.

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  7. I called my county in Oregon for help with this and was told there was an almost 3 year waiting list. I said I was surprised because the funding was just increased so much. She said (RUDELY) that they don’t have enough workers to do all the jobs. I said that I thought this was supposed to stimulate jobs (we have 19% unemployment). She said that it takes too long and they only work with 2 contractors. In essence they will keep the money in the bank for 2-3 years and draw interest on it… Another failed attempt by government!!!

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  8. [...] website. Certainly, no one can argue against the benefits of home weatherization. The point that is drawing controversy is the sheer predicted cost needed to fully carry out the weatherization revolution that the aging [...]

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  9. As a contractor, our company has attempted to get in on the program in the state of California. We have met all of the requirements, obtained all of the necessary licenses, paid out of pocket for additional training but have been shut out of the bidding process as the local agencies (whom have had contracts with the state government for years/decades) are trying to keep the work for themselves in an attempt to make as much money as they can in the allotted time. The caveat to this is that they do not have the personnel or means to ramp up in time but are willing to risk losing a large portion of the money versus sharing the work. The government has also mandated that any stimulus contracts be prioritized to businesses whom employ union employees. A real job creating stimulus huh? This ridiculous attempt at stimulating the economy is another smoke and mirrors game to make the government look like they are providing for our needs. What they are really servicing are those who can help them politically. This not the kind of change we need. We need fair and equitable job creation.

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  10. [...] for energy auditors.” The stimulus package has allocated billions of dollars for “weatherization,” which is basically making buildings more energy efficient through things like upgrading [...]

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