John is currently a visiting scholar at the Carnegie Endowment for International Peace in the Carnegie Energy and Climate Program. He is currently evaluating and commenting on U.S. energy policies and focusing on clean energy and economic stimulus initiatives. He is also providing analysis to the U.S.–China provincial and municipal energy efficiency management program for the Carnegie Endowment.

John’s paper for the Carnegie Endowment examines if the massive increase in funding for the Weatherization Assistance Program can be spent well, or if it is simply money thrown at a “feel-good program”.  According to the paper, the answer to this question will “depend on the ability to successfully complete three tasks:

1. Accelerate the administration of the program, including bringing together a federal, state, local, and private sector implementation structurewith transparent monitoring and verification of the results.
2. Secure the support and participation of stakeholders with an interest in the success of the program, not only because their support is essential,particularly in the southern states, but also to build confidence in the directionof the stimulus package.
3. Translate the federal stimulus investment into a self-sustaining,ongoing activity that relies on other funding sources and is recognized as vital in meeting long-term national goals.”

John analyzes each of these three tasks, discussing the potential problems and opportunities associated with each, and he provides recommendations for successfully accomplishing each. The full paper, which I highly suggest reading, can be found here.

While there is still a lot of planning to be done, this page is a great insight into a lot of the discussions that have already been happening.

Read more here.

On Tuesday, President Obama signed the $787 Billion American Recovery and Reinvestment Act into law. The act is estimated to save three and a half million jobs over the next two years.

We’ve kept an eye on it through its development, and I want to give an update as to what made it out the other side and into law. My comments on building related portions are below. A more inclusive evaluation of the stimulus’s green measures by the Alliance to Save Energy can be found here and here.

• DOE’s Weatherization Assistance Program: $5 Billion
  • The House version of the bill allocated $6.2 Billion and the Senate version set aside $2.9 Billion. The final version ended somewhere in the middle. With the amount of money allowed per home increased to $5,000, the program aims to retrofit roughly 1 million homes in the next two years. As we’ve said before, this has the potential to be a really great thing for the economy, energy independence, and national carbon footprint. That said, scaling the program up from $227.2 Million to $5 Billion (22 times larger) will require a monumental effort in management, training, and data analysis. I will post more about our thoughts on this in a separate post.

• Retrofitting Federal Buildings – $3.6 Billion for Department of Defense (DOD) energy efficiency projects and modernization of facilities, $4.5 billion to GSA for measures to convert GSA facilities to High-Performance Green Builings, $400 million to establish the Office of Federal High Performance Green Buildings, $75 million for Defense-wide funding of research, development, text and evaluation projects, including pilot projects, demonstrations, and energy efficiency manufacturing enhancements
  • This is a bit different from what was proposed in the senate and house bills. The House version gave $6 Billion to GSA for improving GSA buildings and $1.7 to DOD for energy efficiency projects and building improvements. The Senate version had the same two measures, but funded at $2.5 Billion and $3.2 Billion, respectively. The senate version also contained $200 million for research ($75 million in the final law), $250 Million for improving the Department of Health and Human Services facilities and $323 million for energy-related construction at the Department of Veterans Affairs medical facilities (both cut from the final).

The final version of this should drastically improve the state of federal buildings, making them more energy efficient and safer, saving tax-payers billions in spending on federal energy bills. The creation of the Office of Federal High Performance Green Buildings will be another great step towards the legislation of “high performance” buildings. Kelly Shultz, our Building Technologies intern, is currently writing a paper on the history of high performance legislation, as well as recommendations for future coordination and implementation. I’ll post this paper in the coming weeks, which will elaborate on the importance of this office.

• Retrofitting HUD Buildings: $2.25 billion for energy retrofit investment grants and loans for Section 8 Project-Based program; $1 billion from the Public Housing Capitol Fund funding to fund improvements in energy efficiency; $2.25 billion for the HOME Investment Partnerships Program to help build and rehabilitate low-income housing; $510 million for Native American housing block grants, to include improvements in energy efficiency
  • This didn’t change much from the senate and house versions of the bill. This section is interesting, because it puts a lot of money into retrofitting buildings at the Department of Housing and Urban Development. Currently there isn’t any sort of coordinated retrofit program at HUD, making this an equal large managerial challenge as the weatherization program increases. However, there is a 1 percent set aside for program management, research, etc., which will aide in running the program. We think this program should be coordinated with the weatherization program, federal building retrofits, and all other retrofit efforts to take best advantage of both the money invested and the opportunity to improve our energy use and climate impact.

• Decoupling and Higher Energy Codes: $3.1 billion for the Department of Energy’s (DOE’s) State Energy Program (SEP), which provides grants and funding to state energy offices for energy efficiency and renewable energy programs conditioned on state Governors’ assurances regarding regulatory policies, building code requirements and the prioritization of existing state programs.
  • I’ve mentioned this section before, and I’m curious how far it pushes the bar on decoupling. Basically, Section 410 of the bill stipulates that a first round of grants will be given based on current allocations, and sets conditions on the states for them to obtain the second round of energy conservation block grants. The conditions are that the governor has to notify DOE that s/he has “obtained necessary assurances” that: (a) the state’s regulatory body will “seek to implement” a policy to make sure utility financial incentives are “aligned” with energy efficiency — which is a weak way of pushing states towards decoupling (but not mandating it); and (b) the state will adopt the latest IECC code for residential energy efficiency and the ANSI 90.1-2007 code for commercial building energy efficiency. At the end of the day, the Act doesn’t require either decoupling or code improvements, but it incentivizes them, with a rather weak incentive for decoupling (but an incentive, nonetheless), and a relatively strong incentive for adopting higher energy codes.

• Green Schools: $9.75 billion for public safety and other government services, which may include assistance for elementary and secondary education and public institutions of higher education, and for modernization, renovation or repair of public school facilities and public institutions of higher education facilities, including modernization, renovation, and repairs that are consistent with a recognized green building rating system
  • The original House version of the Act had $14 Billion for school modernization. Which has been trimmed and watered down, offering less money and less emphasis on energy efficiency measures.

• Green Jobs: $500 million for research, labor exchange and job training projects to prepare workers for careers in energy efficiency and renewable energy industries, and up to $37.5 million provided for Job Corps Centers, which may include training for careers in energy efficiencyo
  • This is an interesting provision that I haven’t read into in enough depth. One of the largest obstacles in the implementation of the Act and its long term impacts on the shape of the economy/job force will be the training of a new “green” work force, and it is important that money be placed aside to the development of curriculum and training of workers. I will read more into this and post what I find.

Overall, I think that while some of the money in the House and Senate versions of the bill have been trimmed down or eliminated, there is still a very significant amount of money being placed into improving our nations building stock, with a keen eye on improving energy efficiency. This will create a large number of jobs, and will take advantage of buildings as the low hanging fruit in our national energy consumption reductions. The Act carries with it many massive managerial challenges for different government agencies, and it remains to be seen how these will be handled. That said, I remain hopeful that this Act will bring our nation’s economy and energy consumption back in a positive direction.

“This is another concern that I’ve had in some of the arguments that I’m hearing. When people suggest that what a waste of money to make federal buildings more energy-efficient — why would that be a waste of money? We’re creating jobs immediately by retrofitting these buildings or weatherizing 2 million Americans’ homes, as was called for in the package. So that right there creates economic stimulus, and we are saving taxpayers, when it comes to federal buildings, potentially $2 billion. In the case of homeowners, they will see more money in their pockets. And we’re reducing our dependence on foreign oil in the Middle East. Why wouldn’t we want to make that kind of investment?”

I couldn’t agree more.

The full text of President Obama’s press conference is available here.

The President is correct.

As a paper by the Federation of American Scientists demonstrates, the Weatherization Program is the longest running, and perhaps the most successful US Energy Efficiency Program. The program, which underwrites a portion of the cost for improving the energy efficiency of low-income homes, reduces heating costs by an average of 31 percent, resulting in significantly lower energy bills that are so important in trying economic times like these. The program also creates roughly 52 jobs for every $1 million of federal investment. The stimulus package’s investment of $6.2 Billion into the Weatherization program will result in roughly 300,000 jobs created.

The program carries a great potential to alleviate both the economic and energy woes our country currently faces. Investing in weatherization through the stimulus bill also provides the opportunity to create a more modern, streamlined and effective system for improving residential energy efficiency in the future. To do so, and to ensure the best use of stimulus funds, the weatherization program needs to improve the software tool that weatherization centers use to determine which retrofits are cost-effective, upgrade and standardize the training for energy auditors and weatherization crews, and start collecting data from the field about the real energy savings and costs of different weatherization measures to continuously improve the program.

FAS applauds President Obama and the members of congress for recognizing the potential of the Weatherization Program, and we look forward to seeing this potential realized.

First of all, the amount of money being put into building retrofits is pretty astounding. Just under 35 billion is included in the house stimulus package that is strictly for retrofitting and renovating buildings. This isn’t all solely for energy-efficiency measures, but much of it is. This includes money to the DOE Weatherization Assistance Program, money for the US General Services Administration to improve energy efficiency of federal buildings, grants to improve the energy efficiency of HUD subsidized housing for the elderly, disabled, and for Section 8, and for improving schools and institutions of higher education.

All of this is really exciting, but it also creates an astounding puzzle: how to ramp up these programs to such enormous levels quickly and effectively. For example, the Weatherization Assistance Program was allocated $227.2 Million last year. There is a national framework and a network of state and local agencies already in place, and allowances per building have been doubled, but absorbing roughly 25 times the amount of money will be a dramatic challenge.  A national framework for training and certification, as well as some sort of national database to expedite the process of analyzing and retrofitting buildings to the full cost-effective level. FAS is currently putting together thoughts on this, and I’ll have more on this shortly.

Another important point to note is tucked into the section on State Energy Program grants. The bill allocates $3.4 Billion to state energy programs, but allows money beyond normal allocations to be distributed only to states that have “decoupled” utility profits from sales in their regulation. This allows for utilities to profit from energy efficiency, rather than strictly from producing more energy, and it has been shown to be an important tool in energy reductions. It appears as though this was Rep. Waxman’s doing, and a more in depth account can be found here.

In addition to being tied to decoupling, these state energy program grants are to be given to states where the residential building code is equivalent or better than the 2009 International Energy Conservation Code (and for commercial buildings, ASHRAE 90.1-2007). This is also encouraging. There are two halves to improving the national building stock through building codes: improving the codes themselves, and then getting municipalities to adopt them. Hopefully this carrot will help push states towards these improved codes.

Its unclear what of this will emerge in the final version of the stimulus, and I’ll be keeping an eye and adding more thoughts as things happen.

We will look through the senate version of the stimulus when it gets sorted out. In the meantime, you can find the full text of the house bill here, and our analysis below.

• Jobs in construction have been hard hit by the crisis in housing finance. Total employment in the industry has fallen by 663,000 jobs since its peak in 2006. In October 2008, 10.8 percent of construction workers were unemployed – one of the highest rates of any industry.
• Rising energy bills are an increasing burden for all Americans but hit low‐income households particularly hard. This program would cut energy bills for low‐income households, whose average energy bill increased by more than 44% since 2001 (Average households in the US spent $1,817 in energy in 2005, the last year for which omprehensive data are available).
• Buildings consume 72% of all US electricity generation and are responsible for 40% of all US carbon dioxide emissions, a larger fraction than either the transportation or industrial sectors. It will be extremely difficult to reach the 80% reduction in CO2 called for in the President‐elect’s campaign without aggressively addressing building energy efficiency.
• The infrastructure for a major retrofit program is in place at the federal and state levels, and at utilities. Unemployed construction workers have the necessary skills and unskilled workers can be trained quickly. Jobs would be created where people live, and could not be outsourced.
• Retrofits that include federal funds would increase the value of homes in the program and provide quality assurance that would further increase home value.

The primary goals of these proposals include:

• Getting construction workers and newly trained retrofitters jobs within weeks of the
  availability of funds.
• Ensuring that the highest possible fraction of residential and commercial buildings is
  given energy retrofits at the time of sale.
• Encouraging retrofits up to the full cost‐effective level, at marginal utility avoided costs
  including a carbon price5 of $25/ton CO2, by combining federal funds with utility capital
  investment and home‐buyer contributions.

Read the full proposal here.