New Senate Bill Will Reduce Homeowners' Energy Bills, Cut Pollution, and Create Jobs
Posted December 5, 2011 in Curbing Pollution, U.S. Law and Policy
Senators Snowe, Bingaman and Feinstein recently introduced the “Cut Energy Bills at Home Act” (S. 1914), a new performance-based tax credit that rewards homeowners for making whole-home energy efficiency improvements. The bill encourages homeowners to make investments in energy efficiency – such as insulation, air sealing, and high efficiency equipment – that will save them money on their energy bills, while decreasing pollution and creating jobs, both in the ailing construction industry and throughout the economy as energy bill savings are respent on other goods and services.
S. 1914 provides a performance based incentive that rewards home owners with a tax credit from $2000 to $5000 for making whole-home improvements. Unlike existing incentives that offer incentives for equipment or measures meeting certain efficiency criteria, the S. 1914 tax credit is based on the total percentage reduction in energy costs compared to the existing home. This technology-neutral approach encourages consumers to invest in the most cost-effective measures first, while also incentivizing deeper energy savings at lower costs. This works because deeper, cheaper savings can often be found when analyzing the building as a whole system, rather than measure by measure. For instance, additional insulation and air sealing can allow for a smaller (and therefore cheaper) HVAC system to be installed, reducing the overall cost of the efficiency improvement. The tax credit in S. 1914 is also performance based, meaning that the amount of the tax credit is tied to the amount of energy saved rather than the cost of the energy efficiency measure. This eliminates a perverse incentive to increase the cost of efficiency to obtain a greater credit.
So how would the credit actually work? To obtain the credit, a homeowner would hire a contractor accredited by the Building Performance Institute (BPI) or a preexisting BPI accreditation-based state certification program, or who is part of a Residential Energy Services Network (RESNET) Energy Smart Home Performance Team. The contractor would create a computer model of the home’s baseline energy use and calibrate this model to the home’s actual energy bills according to BPI/RESNET standards. The software used to create this model must meet RESNET specifications.
After the baseline model is created, the contractor would recommend energy efficiency measures to the homeowner and model their projected energy cost savings. The contractor would then install the measures as modeled and ensure that systems are installed properly by conducting test-out according to RESNET/BPI procedures. The amount of the credit varies from $2000 to $5000—$2000 for 20 percent energy savings, increasing by $500 for each additional 5 percent in energy savings, up to a maximum of $5000 for a 50 percent improvement. The amount of the credit is also capped at 30 percent of the amount spent by the homeowner on the retrofit.
Last Congress, Senator Snowe included a similar whole-home performance based credit for the Home Star legislation Congress was considering. NRDC also strongly supported this credit, which offers home owners a tax incentive for making whole-home energy improvements. This year’s bill has the same intent, but with structural differences. S. 1914 is supported by the home performance industry, efficiency advocates and environmental groups.
For more information on how the bill works and perspectives from various stakeholders, check out a webinar being hosted by Efficiency First at 3:40 ET on December 6th. Click here for more information about the webinar.
S. 1914 is exactly the kind of bill we need to jump start the ailing construction industry while providing significant energy bill savings for consumers. We applaud Senators Snowe, Bingaman and Feinstein for introducing the bill.
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Comments
asmith@esateam.net — Dec 6 2011 12:17 PM
This is great news for American home owners and the country. Too often our potential clients want solar installed when their homes leak like a sieve. Focusing the improvements on the most cost effective measures with the highest return on investment is the motto we live by. I encourage everyone to call their Congressional delegations and voice your support for this bill.
JohnL — Dec 6 2011 10:11 PM
So this means they are going to give $5000 to someone who buys a indoor or outdoor WOOD boiler to pollute my air! Great I have been complaining for 7 years that I dont have clean air. That means now the rest of you will lose your clean air! Its about time some other people are affected!
WaneG — Dec 8 2011 09:45 AM
@JohnL, not sure where a wood fired boiler entered the picture but a lot of them use natural gas. You seem all worked up over it so maybe they are prevalent in your area!!!
Winston Chapelmount — Dec 8 2011 11:27 AM
This bill is fantastic. Got to throw out my congrats to Olympia Snowe (not only from a cool state but also the owner of a fantastic name) for making a logical, performance based system.
I have got to say though. I have historically had a lot of trouble finding out incentive and bill issues in general.
I ran across www.energygridiq.com not too long ago and it has 100% turned things around.
However, I wasn't putting wood boilers in haha. not sure what that is all about.
Most of the incentive tech is for 'clean tech' products. Perhaps it is low burn pellet fueled wood burners? I'm not sure.
Jim Travers — Dec 8 2011 02:56 PM
Unfortunate that Meg Waltner is so misinformed about this bill that she misleads readers to believe this $5k tax credit will result in less pollution when in fact it will greatly increase pollution by rewarding those who install outdoor wood boilers, which are dangerously polluting.
So many environmental and health organizations have reported on the dangers posed to our health from these wood burning outdoor boilers, it is baffling that Ms. Waltner could be so uninformed on the subject, considering the voluminous reporting NRDC has presented on the subject of outdoor wood boilers:
http://www.nrdc.org/search.asp?cof=FORID%3A11&ie=UTF-8&q=outdoor+wood+oilers&sa.x=0&sa.y=0&cx=001024953138106184952%3Alevppyfplwy&hq=-inurl%3Ahttps&t=iframe
Um, WaneG, outdoor wood boilers burn wood, not natural gas. Here's the Bill, perhaps you'll read it:
http://thomas.loc.gov/cgi-bin/bdquery/z?d112:s1914:
Meg Waltner — Dec 9 2011 04:39 PM
In response to the comments on outdoor wood furnaces, we are currently looking into how these products are modeled under the BPI/RESNET standards and how to address any issues. S.1914 is a broad bill that incentivizes homeowners to make whole-home energy efficiency improvements. Our intent is not to encourage homeowners to retrofit their homes in ways that would increase pollution and we will work to address this if it is the case. The credit is performance based and technology neutral, with the amount of the credit determined based on energy savings, measured in terms of projected energy cost reduction. The credit ranges from $2000 for 20% energy savings up to a maximum of $5000 for 50% energy savings. In order to obtain the full $5000 credit a homeowner would have to reduce the total projected energy costs of the home —including lighting, appliances, water heating, and HVAC — by 50 percent and make a $15,000 investment (as the credit is capped at 30% of cost). Energy costs were used to measure energy savings because cost is most meaningful to consumers and because cost is often a good proxy for the environmental impacts of building energy use. Note that these costs are specified in the modeling standard and are not necessarily what is faced by an individual consumer. Again, we are looking further into how wood products are accounted for under the standards and will work to address any issues.
Jim Travers — Dec 12 2011 03:11 PM
Thank you Meg, but while you're at it, please do address the NRDC stance on incinerating municipal solid waste, burning biomass for energy production or landfill gas collection for use as a transportation fuel or to power electrical generators. Composting Organic Wastes, too.
None of these so-called 'fuels' are either sustainable or clean burning.
Burning biomass is dirtier than burning coal and the US Energy Information Administration has determined dirty waste incineration is more costly than nuclear power and wastes recoverable resources. According to the EPA, Recycling saves 4-5 times the energy incinerating recoverable materials in the waste stream creates.
Recovering Landfill Gas is important, but creating Landfill Gas by landfilling compostable materials should be avoided, not encouraged or rewarded.
Segregating organic wastes from the waste stream for composting should be encouraged and rewarded. This is a sustainable practice and we should promote composting programs.
Here is a list of the technologies tat could receive a grant or tax credit under this legislation:
Eligible Renewable/Other Technologies:
Solar Water Heat, Solar Space Heat, Solar Thermal Electric, Solar Thermal Process Heat, Photovoltaics, Landfill Gas, Wind, Biomass, Hydroelectric, Geothermal Electric, Fuel Cells, Geothermal Heat Pumps, Municipal Solid Waste, CHP/Cogeneration, Solar Hybrid Lighting, Hydrokinetic, Tidal Energy, Wave Energy, Ocean Thermal, Fuel Cells using Renewable Fuels, Microturbines
Remove "Landfill Gas;" "Biomass;" "Municipal Solid Waste;" from this list and I would encourage its passage.
Good, Clean, Renewable, and Sustainable technologies should be supported and rewarded... now more than ever.
James B — Dec 14 2011 02:02 AM
You got to be kidding, right?
S 1914 will pay people with outside wood boilers to pollute the atmosphere with hazardous contaminates.
Disgusting, where have our morale values gone?