Obama Touts Homestar Program to Help Homeowners and Job Seekers

Recently President Obama outlined more details of the new “Homestar” program that he had first mentioned in the State of the Union Address.

The administration sees the program as a way to create jobs by encouraging American families to invest in energy-saving home improvements. The Senate Democratic leadership included a Homestar proposal as part of the jobs agenda released on February 4, 2010, and the Administration will work with Congress to get it passed.

The Administration sees the residential retrofits program as a lynch-pin in its economic recovery program. Recently, the President spoke of the benefits of the Homestar program at Savannah Technical College in Savannah, Ga., where workers are being trained in new skills for energy retrofit projects.

With unemployment in the construction sector near 25% and with substantial underutilized capacity in the U.S. manufacturing sector, the Homestar program has the potential to jump-start economic recovery by boosting demand for energy efficiency products and installation services. The program could help middle-class homeowners save hundreds of dollars a year in energy costs while improving the value of their most important investment – their homes.

Key components of the Homestar Program include:

• Rebates delivered directly to consumers: Like the Cash for Clunkers program, consumers would be eligible for direct Homestar rebates at the point of sale for a variety of energy-saving investments in their homes. A broad array of vendors, from small independent building material dealers, large national home improvement chains, energy efficiency installation professionals and utility energy efficiency programs (including rural utilities) would market the rebates, provide them directly to consumers and then be reimbursed by the federal government.

• $1,000 - $1,500 Silver Star Rebates: Consumers looking to have simple upgrades performed in their homes would be eligible for 50% rebates up to $1,000 - $1,500 for doing any of a straightforward set of upgrades, including: insulation, duct sealing, water heaters, HVAC units, windows, roofing and doors. Under Silver Star, consumers can chose a combination of upgrades for rebates up to a maximum of $3,000 per home. Rebates would be limited to the most energy efficient categories of upgrades—focusing on products made primarily in the U.S. and installed by certified contractors.

• $3000 Gold Star Rebates: Consumers interested in more comprehensive energy retrofits would be eligible for a $3,000 rebate for a whole-home energy audit and subsequent retrofit tailored to achieve 20% energy savings in their homes. Consumers could receive additional rebate amounts for energy savings in excess of 20%. Gold Star would build on existing whole home retrofit programs, like the EPA’s successful “Home Performance with Energy Star” program.

• Oversight to Ensure Quality Installations: The program would require that contractors be certified to perform efficiency installations. Independent quality assurance providers would conduct field audits after work is completed to ensure proper installation so consumers receive energy savings from their upgrades. States would oversee the implementation of quality assurance to ensure that the program was moving the industry toward more robust standards and comprehensive energy retrofit practices.

• Support for financingg: The program would include support to State and local governments to provide financing options for consumers seeking to make efficiency investments in their homes. This will help ensure that consumers can afford to make these investments.

“The Home Star program is a great example of ‘build it and they will come,’ because the immediate discounts for homeowners will serve as a powerful incentive for them to retrofit their homes and achieve lasting energy savings,” noted said Brad Penney, director of government relations at the Alliance to Save Energy, one of the first organizations to endorse the program.

“Home Star will also mark a critical step in reversing depression-level unemployment in the construction trades and provide the catalyst for building a new industry based on home energy retrofits, employing thousands of workers who otherwise will remain unemployed.”

The Administration anticipates the program will result in the creation of tens of thousands of jobs while achieving substantial reductions in energy use – the equivalent of the entire output of three coal-fired power plants each year. Consumers in the program are expected to save between $200 - $500 per year in energy costs.