Weatherization Stimulus: Lots of It, Fast

For the thousands of contractors and state and local agencies that have received funds under the Energy Dept.'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 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 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. Industry insiders (who don't want to go on record criticizing the package) are 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 ceiling for eligible 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 is also concerned about how the agencies will spend the funds in a timely and effective manner.

Low-Hanging Fruit

While the path ahead is still unclear, the motivation behind President Obama's decision to make weatherization one of the first priorities 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, $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. (The Weatherization Program's estimate comes in at about $413.)

For low-income families, such savings could be crucial. According to an Oak Ridge National Laboratory study, low-income families paid 17% of their annual income on energy, compared with the 4% 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 or still in the development phase. Residential homes accounted for 21% of all U.S. energy consumption in 2007, according to the Energy Information Administration.

So clearly a boost for the weatherization program is savvy, and ramping up the current funds to such a large extent, laudable. But some may argue that more of the $6.2 billion should be put toward ensuring that the funds are being spent properly, or that the timeline should be relaxed to accommodate a slower ramp-up. Close attention needs to be paid to where this money is going, and how, exactly, it will be spent.

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