Energy Secretary Steven Chu on home weatherization: Saving money by saving energy

The guest blogger today is the Nobel prize-winning Secretary of Energy Steven Chu, by way of HuffPost.  As you’ll see, he’s the mirror image of Bush’s Energy Secretary (see “Bodman as Orwell: DOE erases ‘most successful’ weatherization program from website“).

Photograph a person holding a caulking gun while caulking the inside of a window.I’ve always been a bit of an energy efficiency nut.

I’ve made it my mission to cut the utility bills at every home we’ve owned. Long before I learned about the risks of climate change, I was fanatical about energy efficiency because I’m cheap.

Whenever my wife and I move into a new home, I check the attic for adequate insulation. I look for leaks around doors and windows and install a programmable thermostat if needed. In our latest home, I’ve also insulated our water pipes with inexpensive foam from our local hardware store and painted mastic sealant on the seams of the air ducts. When our hot water heater needed replacement, we installed a tank-less water heater which decreased our summer-time gas use by 50%. In the summer, we found that setting the thermostat at 77 – 78 degrees and a gentle breeze from a fan was all that is required to be comfortable.

So far, we are on track to cut our utility bills by about half compared to the previous owner, but we are doing more. Our home has two large skylights that funnel too much heat out in the winter and let too much heat in the summer. We intend to replace these older windows with modern widows with five times the efficiency.

Taking these steps is called “weatherization.” I would rather call it “saving money by saving energy.” Over the next several years, we want to help millions of American families seize the same opportunity to cut their utility bills by making their homes and appliances more energy efficient while increasing comfort.

We are making a major down payment on this effort through the President’s economic recovery plan.

First, the Recovery Act expanded tax credits for energy efficiency upgrades to your home. If you purchase and install certain energy-efficient windows, insulation, doors, roofs, or heating and cooling equipment, you can receive a tax credit for 30% of the cost, up to $1,500. For example, if insulating your attic costs around $1,600, you’ll receive a $480 tax credit, and you could save up to $200 on your utility bill each year.

Second, we are launching an innovative new effort called “Retrofit Ramp Up” that will simplify and reduce the cost of home retrofits by funding pioneering programs that reach whole neighborhoods and towns. If we can energy audit and retrofit a reasonable fraction of the homes in any given residential block, the cost will be greatly reduced. Programs such as these will decrease barriers to saving money: inconvenience, inertia, and inadequate information. We want to make home energy efficiency upgrades irresistible and a social norm for homeowners.

This effort could offer homeowners innovative ways to finance the upfront investments they can’t afford on their own. For example, homeowners might receive a loan for an energy improvement and pay back the principal and interest over time via an assessment on their property tax bill. The homeowners might pay an extra $400 per year on their property tax bill but save $500 a year on their utility bill. Since the financing would be attached to the property tax bill, both the savings and the loan payments stay with the house if the owners decide to sell.

Finally, for low-income families who are hit hardest by high utility bills, the Recovery Act provides $5 billion for home weatherization. This is the largest single investment in home energy efficiency in U.S history. This program is creating jobs now, putting money back in the pockets of hardworking Americans, reducing our environmental footprint, and making these homes more livable. However, some people – including me – have been frustrated that the program started off more slowly than we’d hoped.

It took a few months for states to develop their plans and for the Energy Department to ensure those plans met the highest standards of accountability. We also used this time to work with the Labor Department to establish standards that guarantee these jobs pay a fair wage. States and their local weatherization agencies also began training this new workforce and buying millions of dollars in necessary equipment and materials, like caulk guns, insulation blowers, and service vehicles. We are taking the care and time necessary to make sure these taxpayer dollars are well spent.

Those purchases are creating jobs. A good example is an insulation machine manufacturer called Krendl in Delphos, Ohio. Because of Recovery Act-driven purchases, Krendl has expanded its workforce by 30 percent, and one of Krendl’s distributors, Applied Energy Products, Inc., increased its staff by almost 60 percent.

Here’s more good news:

  • All 50 states have received 100% of their Recovery Act weatherization funding and have begun to double and triple their home energy efficiency efforts. Workers are being hired, homes are being improved, and families are being helped.
  • In September, we estimate we weatherized 15,000 – 20,000 homes – the fastest pace in the 30 year history of the Weatherization Assistance Program. We expect to be weatherizing 20,000 to 30,000 homes per month soon.
  • This effort has already created or saved thousands of jobs, and the pace of hiring is accelerating. The Department of Energy and our partners have an aggressive training and technical assistance program to continue to invest in green workforce development.

We’re training a workforce and building a home energy efficiency industry that will be a crucial part of America’s new, clean energy economy. As states, utilities and private companies increasingly pursue home energy efficiency – in part because of the innovative incentive programs I described earlier – we will have the capacity to help millions of Americans lower their utility bills.

Energy efficiency is simply good economics. It will save you money. It will create jobs. It is a way for you to personally decrease your carbon emissions and help save our planet.

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11 Responses to Energy Secretary Steven Chu on home weatherization: Saving money by saving energy

  1. Leif says:

    Way to go Secretary Chu, your the man!

  2. Wes Rolley says:

    Secretary Chu has the right idea. There are times, however, when you just have to do the math. We purchased our home in the mid-1970’s. It has 21 energy ducts called single-pane, aluminum framed, 48 x 72 in windows. We have a total annual energy bill of $1,526. Were we to replace all of the windows, and were that to save 100% of our energy costs, it would still take at least a decade to recover the investment.

    This type of retrofit has to be tied to other remodeling efforts, similar to the Architecture 2030 plans. If you don’t make energy efficiency improvements, you don’t get the building permit.

  3. David Lewis says:

    To make the payback of ten years more palatable to you, Chu is advocating attaching the financing to the property tax bill. Paragraph 10, above. Your overall cost of home operation immediately declines because your utility bill goes down more than the tax bill goes up. Your responsibility for paying for the improvements ends if you sell your home during the payback period. It remains to be seen what the effect on the selling price of a home is if its property taxes are higher, even if its overall cost of operation including taxes is lower, because, duh, buyers are allergic to the “tax” word.

    Give the man credit: he has done the math. If he could do what he wanted, the price of emitting carbon would be high enough to drive CO2 emissions out of the economy. Study the guy. People who think Obama has done Jack Squat wouldn’t be able to understand the difference between Chu and anyone else who has ever headed the DOE.

  4. Maija says:

    This is the type of policymaking America desperately needs. It is forward thinking, environmentally friendly, practical, financially feasible and creates local, non-exportable jobs. Great stuff.

  5. Rabid Doomsayer says:

    Why are we still building houses with black roofs in hot climates? Are we likely to undertake that much energy saving that has a cost when we won’t even use the no cost options?

    While I hate governments breathing down my neck telling me do this, don’t do that, we can be incredibly stupid and need some regulation.

    Joe, I don’t know how you keep up your optimism.

  6. Leif says:

    Rabid Doomsayer, #5. Good point however if we used the advertising media to get the money savings across
    you might be on to something. Steven Chu also wants the white roofs to make up for some of the reflection we are loosing from the Artic ice loss. A two-for. After all the advertising media can even convince people to do things against their best interest. It should be a no-brainer for them.

  7. Mark Shapiro says:

    Any consumer concerned about her energy bills can lower them forever with efficiency and conservation measures that are available to every citizen, to every human being.

    Every consumer has tools to protect them from rising energy costs.

    We need to hammer this point every time we discuss energy and the economy, every time the deniers, the delayers, and the levitts claim that we are raising costs for consumers, that we are squeezing the middle class. Remind every reader, at every point, that we want the middle class pay less – much less – for energy simply by wasting less.

  8. Cait says:

    The UK desperately needs to do this kinds of thing. It offers grants for insulation, but it’s all very opaque and difficult to actually apply for.

    I’m just wondering whether local teams of ‘weatherisation’ helpers / volunteers could also help people by completing audits for people pointing out everything – from the small things to the big expensive things that they could do to act.

    Do you have any volunteer groups doing anything like that over there? Part of the Green Jobs initiatives?

    …just wondering about how something like that could be pursued in the UK… Hmmm…

  9. Leif says:

    Back in my farm boy youth we always “white washed” the chicken coop roofs which made a significant difference in the coop temperature. Often the difference between life and death for chickens. With modern technology I am sure there is a much better painting solution than white wash, which, if memory serves me correct, was just water and lime that we mixed in LARGE batches. A problem with that was that it did not last that long and needed to be freshened up yearly or perhaps longer. It was cheap however.

  10. I have personally worked with customers taking advantage of the Recovery Act tax credits and the “Retrofit Ramp Up”. To a one, they are excited and very appreciative that these steps were offered to them to improve the efficiency of their homes. Some were already going to replace their windows, but decided to complete the house instead of 1/2 of the windows. Other customers have initiated the process due to the tax incentives and programs available to them.

  11. Hubie says:

    Though not well defined the weatherization program is a great idea. But why not make it much easier and increase the parameters of the existing Federal Tax credits for weatherization. They are now 30% of the cost of materials up to a $1,500 maximum for improvements to the homes envelope. Change that to 50% of materials for do-it-yourselfers and 50% of total project cost (including labor) for thosee hiring professionals. Change the maximum to $3,000 and $6,000 respectively. Home Despot will see increased business and the small companies that do Home Performance work will be hiring new employees.