Last year, I sat at a Home Depot in Alexandria, Virginia as the President first announced his desire to give homeowners a financial push to make their homes more energy efficient. It is encouraging to hear the President continue to preach home energy efficiency today and I hope Congress will continue to work hard to make this a reality.

And there is certainly work to be done, since Congress has the final say on this program and it is certainly not a done deal.  Legislators are hard at work figuring out the mechanics of this program, and everything is subject to change.  New programs like this, no matter how beneficial, must be thoroughly scrutinized before becoming law to make sure that the money gets to where it needs to go in a timely fashion.  Certainly, this is not an easy job.

Today, Obama explained that the Home Star proposal would provide rebates that would go to consumers making improvements when they are purchasing efficient products and efficiency services. The program has two types of rebates: Silver Star and Gold Star.  The Silver Star rebates would provide $1,000 to $1,500 to consumers for each straightforward upgrade, like adding insulation, duct sealing, or purchasing new efficient water heaters, HVAC units, roofing and doors. Consumers may get up to $3,000 in Silver Star rebates. 

The Gold Star Rebates are where consumers get the best bang for the buck.  Gold Star would offer a $3,000 rebate for a retrofit based on a home energy audit that will save at least 20 percent on energy consumption.  The Gold Star rebate would increase for every additional 5 percent of energy saved.  No rebates, Silver or Gold, could exceed 50 percent of the total project cost.

A bit of simple math is all it takes to get motivated about this program.  The average energy bill in this country is around $2,400 a year.  A retrofit resulting in 20 percent savings is $480 per year, or about $40 a month.  A 50 percent savings would be $1,200 a year, or about $100 per month.  Of course the actual monthly savings will fluctuate, but you get the idea. 

Not only are American homes so wildly inefficient that billions and billions of dollars in wasted energy are holding back our economic recovery, but fixing our leaky homes has the potential to create countless high quality jobs that cannot be sent overseas.  There are well over 100 million homes in this country and nearly all of them can slash their energy use by half with off the shelf technology.  With home efficiency, we will not be limited by the amount of work that needs to be done, but rather the amount of people out there to do the work.

This is a great idea, and certainly not new (but the catchy name is a substantial improvement). NRDC advocated for a retrofit program in the Northeast during the oil price spike two summers ago (because we could save more oil from these retrofits than we could drill from the outer continental shelf and faster), joined with other forward thinking groups to push it in the original Recovery Bill, and worked very hard on the retrofit incentives that can be found in all pending energy and climate legislation. We are also working on tax credits to encourage a suite of energy improvements to homes.

The only question now, given the groundswell of support, is how soon can we start? The incentives in the climate bills will not begin with until the carbon cap takes effect, so proposals to start them earlier, as mentioned in the NYT, should be a priority.

In reality, we can't afford to wait any longer. The efficiency of most homes is simply appalling, and we literally let the money we spend to heat our homes escape through the cracks. Our construction industry is also one of the hardest hit by the recession. Out of work builders could harness their understanding of building science to join the growing residential efficiency industry. This industry can grow, create jobs that can't be sent overseas, cut carbon emissions, and put money in people's pockets. There is no downside.

There is one issue to watch in all this talk -we must get what we pay for. We can't afford to pay for energy savings that do not occur, so the verification component to these proposals is incredibly important. And in this area, they are not all created equal. The final product must make sure that tax dollars are spent in a way that lowers homeowners' energy bills, and not just to keep contractors busy.

In the meantime, there are still simple steps homeowners can take to make their own houses and apartments more efficient themselves. Check out -- Cold Weather Planning: Seven Steps To a Warmer Home.

"We will soon lay down thousands of miles of power lines that can carry new energy to cities and towns across this country. And we will put Americans to work making our homes and buildings more efficient so that we can save billions of dollars on our energy bills.

But to truly transform our economy, protect our security, and save our planet from the ravages of climate change, we need to ultimately make clean, renewable energy the profitable kind of energy. So I ask this Congress to send me legislation that places a market-based cap on carbon pollution and drives the production of more renewable energy in America."

Notice the order here. We address our infrastructure, we focus on our economy through building retrofits and we push forward on renewable energy, all within the overarching context of climate change action. I agree completely. Climate change legislation is huge for efficiency.

The President says we are going to get to work making our buildings more efficient and save billions. He is not exaggerating; the benefits are huge.

Retrofitting homes is a labor intensive endeavor. An average home retrofit takes a crew of 3 people about 5 days to complete. There are 111 million homes in this country. We can cut consumption in these homes 30-50% or $700 to $1150 annually on average. Every 4 crews or so needs a project manager. Every retrofit company needs accountants, executives, salesmen, and administrative staff. They need legal advice, they need office supplies, and they need to advertise. The insulation, caulk and sealants, appliances, and mechanical systems they install have to be manufactured. The money that each person saves from being wasted on energy will be spent, supporting other industries and creating more jobs. Add to this projection the 4.8 million commercial buildings in this country, representing 72 million square feet of space. No, he is definitely not exaggerating.

Sounds like a plan to me.

"...the best case scenario would be for Congress to adopt the House provisions in conference (with the exception of the Senate's version of the tax credit for home efficiency upgrades)."

And that's almost exactly what happened. Congress clearly took the President's words to heart and in the process created or saved 1.5 million clean energy jobs (in efficiency and renewables) according to our calculations. In the case of efficiency, the funds will help the ailing construction industry get back on its feet by transitioning them to improving the existing building stock.

The results are impressive,

* $5 billion for the weatherization assistance program. This creates roughly 90,000 jobs and starts the massive scale up of the home efficiency industry that we need to meet the President's goal of improving the efficiency of the building stock by 25%. To get to our climate change goals, we absolutely have to scale up this industry even well beyond this level.
* $4.5 billion for greening the buildings of the General Services Administration (a portion of which will be used for efficiency). Each dollar spent on efficiency in these buildings will come back to taxpayers many times over since we pay these bills every single year.
* $3.1 billion for State Energy Programs, including the conditions that if satisfied could lay the groundwork for savings of $135 billion dollars. The states will use this money for their new and existing efficiency and renewable programs, but enticing them to allow their utilities to profit from efficiency and updating their building codes is absolutely huge.
* $3.2 billion for the local block grants for efficiency and renewable energy.
* $250 million for retrofits of low income multi-family rental housing through the Department of Housing and Urban Development. This money will get out to performance contractors almost immediately and return to tax payers nearly immediately, because many of the residents of these buildings also receive government assistance on their energy bills.
* An extension and improvement of the tax credit for home efficiency upgrades which avoids wasting government money by adopting performance criteria that will actually save energy.

This is coupled with funding for many other agencies and programs that may be used on efficiency, although that is far from certain. Perhaps the President may have a few suggestions for these decision makers.

I have seen criticism of the efficiency pieces in the bill because these funding amounts are such large increases from business as usual. It's true that these are big jumps, but I am not sure when these folks feel the appropriate time for scaling up efficiency will be. The same scale-up issues will have to be dealt with whether we start the process now or 10 years from now. If we had acted this aggressively 10 years ago, we would certainly be in a better spot. The only solution is to get the ball rolling and use the savings from these policies to invest even further in efficiency and clean energy.

The policies in this bill, combined with the funding for renewable energy and transit infrastructure and the removal of funding for dirty fuels make this an exciting departure from the policies of the recent past. The $30 billion in appropriations and $20 billion in tax incentives for clean energy are huge strides towards the real energy policies that we need to meet our climate goals. Clearly Congress is responding to strong leadership from the new President and is committed to working with him to address the huge challenges we face.

"...why would that be a waste of money?"

He is referring to efficiency generally and specifically to federal buildings and home weatherization. He's right. It's not a waste of money. It's a guaranteed return on investment. Apparently, some folks don't like getting a return on their investment, and I‘m glad they aren't investing my money.

Wait, they are. It's our tax money that Congress is investing, and it should be going to our homes being weatherized and reducing the electric bill of every federal building (which we pay). Do you want to keep paying these bills as energy costs escalate, or do you want to put people back to work right now with jobs that will make these buildings more efficient and bring these bills down permanently?

I guess it's not so simple. I am waiting for an answer to the President's question, and all I hear are crickets. I can only hope that clearer heads prevail in what ultimately becomes law.

Enough ranting, on to the specifics.

Weatherization
The Weatherization Assistance Program (WAP) is the largest energy efficiency program in the country and it operates in all 50 states. States weatherize (or retrofit) homes and on average reduce energy consumption by 22 percent. The amount of money used for improvements in each home is limited by statute. Roughly 150,000 homes were weatherized last year and the total number of eligible households is estimated at around 28 million and growing with the price of energy. Many households eligible for WAP are also eligible for fuel assistance, meaning the government pays many of these energy bills.

The House version of the bill funds WAP at $6.2 billion while the Senate version set funding at $2.9 billion. Both versions increase the limit per household so more savings can be achieved.

The lower amount in the Senate version sacrifices many benefits. According to analysis produced for NRDC by the Political Economy Research Institute at the University of Massachusetts - Amherst, the Senate version would create 50,000 jobs while the House version would create an additional 60,000 jobs. The House funding levels should be adopted to make these jobs real.

State Energy Program
The Department of Energy's (DOE) State Energy Program (SEP) is a conduit for funding from the federal government to state energy offices, which conduct the majority of energy efficiency and conservation programs within a state.

The House provided $3.4 billion to SEPs, while the Senate only set aside $500 million. Scaling up these existing efficiency programs at the state level is the fastest way to get the work started. And regardless of whether the state is traditionally aggressive on efficiency or not, there is plenty to do.

In the case of states, the conditions on the funds may be even more important than the specific amount. The House version encourages states to adopt pro-efficiency utility regulatory reforms and more stringent building energy codes. These utility regulatory changes are unbelievably important in getting states and utilities to buy into bringing efficiency to their customers.

If a reasonable number of states adopted these policies, consumers and businesses would save about $135 billion over ten years, and thus create a substantial number of jobs. Global warming pollution would also be reduced by 150 million metric tons of CO2 annually by 2020. These savings come from states adopting the pro-efficiency utility regulatory reforms (this allows them to start efficiency programs) and adopting the most up to date building energy codes. The savings here are huge and making sure this language makes the final bill is very important.

Federal Buildings
The House provided $6 billion to the General Services Administration (GSA) for greening existing buildings and prioritizing energy efficiency. The Senate version cut this total to $2.5 billion.

GSA is basically the federal government's landlord. It owns and leases over 352 million square feet of space. Folks over at GSA have told me that the backlog of projects is so massive that even the larger number would not cover all the needed improvements.

President Obama pledged to reduce energy consumption in existing buildings by 25 percent, and allowing GSA to lead by example is a great start. The bill needs to make sure that efficiency is truly the focus of these improvements to maximize cost savings and job creation.

Green Schools
The biggest difference between the House and Senate bills on green buildings is renovating schools. $14 billion was zeroed out from K-12, while $6 billion was axed from higher education. 25 percent of this money was to be used for efficiency.

Efficiency in schools should be pushed at every level as a cost reduction measure, just like in low income housing and in federal buildings where tax dollars pay the bills. It's just smart investing and the funding here would have helped immensely.

The Senate cut these provisions, but found space for 50 billion in loan guarantees for dirty fuels that won't provide jobs anytime soon. It is much riskier to provide subsidies for capital intensive power plants with skyrocketing costs and environmental consequences than it is to invest in efficiency. This money would be much better spent on renovating schools and bringing those bills down. The House version doesn't have the risky guarantees and uses the money more effectively.

Tax Credit for Home Efficiency Upgrades
Both the House and Senate versions extended the tax credit for home efficiency improvements (25C) through 2010 and increased the credit amount. The Senate version updated the performance criteria for eligibility in the credit, which was too low and would have resulted in wasteful spending. By adopting appropriate performance criteria for windows and adjusting the qualification levels for mechanical equipment, the Senate version cuts the cost to the taxpayers and will save more energy. The Senate version is far better for taxpayers, for economic recovery, and for the environment.

Other Efficiency Policies
The other efficiency policies that are consistent close in both versions are,

• Local Block Grants - Many efficiency projects are best pursued at the local level and these grants will be used for these. Funding will be either $3.5 (House) or $4.2 (Senate) billion.
• Public and Assisted Housing Energy Efficiency - Either $2.5 (House) or $2.25 (Senate) billion will go to the Department of Housing and Urban Development for efficiency improvements. Much like Weatherization and Federal Building Efficiency, this will lower energy bills that are ultimately borne by the taxpayers.
• Qualified Energy Conservation Bond program - Both the House and Senate provide $2.4 billion for this program, which allows states to issue tax credit bonds for conservation and tweaks the language so that the bonds can be used for efficiency retrofits. This will provide a much needed alternative financing source for retrofits locally.

We support the higher funding amounts for efficiency as the most effective stimulus.

Bottom Line
We are talking about a lot of money in the economic recovery bill, and it is much better spent on programs that reduce costs, energy consumption, emissions, and most of all, create jobs. Only efficiency satisfies these conditions.

The House bill is far superior, and the best case scenario would be for Congress to adopt the House provisions in conference (with the exception of the Senate's version of the tax credit for home efficiency upgrades). The biggest potential is in the House conditions on State Energy Grants.

Given that we clearly have a President that gets it, I would describe myself as cautiously optimistic that Congress will do the right thing. We will all just have to wait and see what happens by President's Day.

Personally, I was overwhelmed by the sheer size of the event. The people, lasers, and multiple projection screens made it seem more like the MTV music awards than a conference. Sensory overload. Combine that with the mind-numbing cold outside and it's a miracle I can even function right now.

The theme of the conference was "Revolutionary Green," which aptly describes the mood of those in attendance. People were buzzing over the possibilities offered by a new Presidential administration and the once far-fetched goals that now seem achievable. Buildings will play the primary role in our transition to the clean energy economy, and the potential to save energy and precious resources in our buildings while simultaneously creating new green jobs and stimulating our economy was always a part of the discussion. The connections between social equity, economic prosperity, and environmental responsibility were subtle like a brick.

But was there more glitter than substance? I would say no, even though there was a lot of flash. The master speakers in particular drove the urgency of the situation home. Personal highlights for me included:

• Desmond Tutu, inspiring the crowd and praising Americans in general for being crazy, wonderful people who provide hope to the rest of the world; he even referred to the green building movement as "the cat's whiskers."
• Van Jones, eloquently explaining why economic and social responsibility is not separable from environmental responsibility. He could not have been more right when he said that the symbol that will most effectively convey our response to global climate change is the caulk gun. Bravo.
• E.O. Wilson, providing the context in which we all work. His general discussions on how we live and the things we value were like a shot in the arm.

Despite the celebratory tone of the conference, the real hard work has yet to begin and I hope the majority of those in attendance understand what really needs to be done to meet our climate change goals. The newest technologies on display in the expo and the beautiful new buildings that we can create now are only a tiny piece of the puzzle. We have to roll up our sleeves and get into existing buildings in the most meaningful way by pursuing energy efficiency. We have to know when to spend our construction dollars on better insulation rather than on more solar panels. And we have to understand that where we build our shiny new green buildings matters as much as how they work. It is completely understandable that this particular event would focus on new, commercial construction, but getting the small army in attendance to promote real change in building policy in this country should absolutely be a goal of the green building movement.