Retrofit Exchange News & Updates

Where the jobs are

2011-07-12T09:59:00.000-07:00

Where the jobs are: Energy savers

By Steve Hargreaves @CNNMoney July 8, 2011: 3:01 PM ET

The number of jobs in the energy efficiency field is set to grow up to four-fold over the next 10 years, but even now vacant positrons can't be filled.

NEW YORK (CNNMoney) -- The prospects for finding a job in most areas of the economy may be getting bleaker by the day, but one sector stands out: energy efficiency.

Over half the energy professionals surveyed recently said they cannot find enough qualified people to meet current hiring demands in this fast-growing industry.

And the problem is only set to get worse.
Over 100,000 people currently work in a variety of energy efficiency roles -- everything from contractors fixing and installing windows to managers running efficiency programs at utilities.
That number is expected to jump up to four-fold in the next ten years, said Suzanne Jones, a spokeswoman for the Association of Energy Services Professionals.
"There's a giant labor gap here," said Jones. "Utilities and others are scrambling to fill these positions, but it's an acute problem."

The secret role of energy in bringing U.S. jobs back

The jobs include contractor positions, people that come over to your house and caulk your windows and replace your furnace as part of an energy retrofit.
These contractors recently got a huge boost when Obama set aside billions for energy retrofits as part of the stimulus package in 2009.

But most of the energy efficiency jobs will be for sales specialists, program managers and engineers involved in the push by utilities to squeeze every last bit of energy out of the existing power grid.

A program manager's job could include things like getting a group of office building owners together to agree to let a utility automatically turn down the air conditioners in a group of buildings during a heat wave.

UCM Launches NERI

2011-07-08T13:51:00.000-07:00

National Energy Retrofit Institute (NERI)

The National Energy Retrofit Institute (NERI) is a national workforce development program and consortium formed to promote an energy retrofit model for the residential energy efficiency sector. This model, when duplicated in communities nationwide, will lead to more “green” jobs for United States citizens and stronger local economies.
NERI’s mission is to support and foster nationwide job creation and related economic development activities for the residential energy efficiency sector. We accomplish this by establishing a collaborative retrofit community (consortium), coupled with industry-specific training and supportive services.
To learn more about NERI, our training, and our vision, register for one of our free webinars. To request information click here.

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Weatherization leads to a warmer home

2011-01-28T06:04:00.000-08:00

January 27, 2011 by Green Impact Zone

At a kickoff news conference last September, Congressman Emanuel Cleaver II introduced Mrs. Renette Riley, the first Green Impact Zone resident to qualify for our Low-Income Weatherization Assistance Program. Once the paperwork was in order, we conducted an energy audit of Mrs. Riley’s home to determine exactly what weatherization work was needed.

The work was completed in December, and Mrs. Riley couldn’t be happier. At the Ivanhoe Neighborhood Council meeting last Saturday, she said her house is the warmest it’s ever been and her electric bill is lower than before. She encouraged her neighbors to run – not walk – to the Green Impact Zone office to apply for the program.

“Thank you for your efficient planning and tireless efforts to make my home warm and cozy,” Mrs. Riley said in a letter to Green Impact Zone staff. “You will never know what receiving a new furnace means to me. Thank you for seeing the great need in our community and taking measures to improve the lives of the seniors and residents of Ivanhoe and other neighborhoods in the Green Impact Zone.”

While not everyone needs a new furnace, weatherization can help qualified homeowners and renters save energy and save money by adding insulation, sealing leaks around doors and windows and repairing furnaces and air conditioners. Find out if you qualify for the Green Impact Zone Low-Income Weatherization Assistance Program. Visit www.greenimpactzone.org/energy to learn more

Top 10 Green Building Trends for 2011

2011-01-24T02:22:00.000-08:00

After discussions with a wide range of stakeholders - policymakers, builders, developers, architects, real estate brokers, appraisers, lenders, and homeowners - Earth Advantage identified the following trends in green building for 2011.
The trends range from green homes becoming easily affordable to community-based energy, from smart appliances to lifecycle analysis of materials.

1. Affordable green. Many people associate green, energy-efficient homes with higher costs, but that's changing. New business models, technologies, and high performance materials are bringing green homes within reach of all homeowners. Free or low cost energy audits are now widely available, and as homeowners become more aware of the benefits of simple, inexpensive retrofits, energy efficiency upgrades are increasingly commonplace. Through programs like Solar City's lease-to-own business model, homeowners can get solar on their roofs without an up-front payment. Habitat for Humanity builds affordable LEED and Energy Star-certified homes across the US for as little as $100,000.

2. Healthy Competition on Energy Consumption. Sharing among "friends" on Facebook and other social networking sites may soon include a healthy competition for who uses the most and least energy in exchange for rewards. Earth Aid, for example, lets you track home energy usage and earn rewards for energy savings from local vendors. You can also elect to share the information with others on Earth Aid to see who can conserve the most energy.

Coupled with developments including home energy displays, DOE's Home Energy Score pilot program, and Oregon and Washington's Energy Performance Score, a lot more people will be sharing and comparing their home energy consumption.

3. Performance-Based Energy Codes. Existing buildings are responsible for most of our energy use and associated carbon emissions, but the prescriptive energy codes used in commercial remodels don't encourage effective retrofitting. Compliance with energy codes is determined at permit time, using prescriptive or predictive models, and actual post-construction may never even be reviewed. Heating and cooling equipment could be faulty or improperly controlled, with significant energy and financial implications.

Under outcome-based energy codes, owners could pursue the retrofit strategy they decide is most effective for their building and its tenants, but they would be required to achieve a pre-negotiated performance target through mandatory annual reporting. The City of Seattle and the New Building Institute have teamed up with the National Trusts' Preservation Green Lab to pioneer a framework for just such a code, for both new and existing buildings.

4. Community Renewable Energy. Neighbors will increasingly band together to get lower prices on solar installations and literally share renewable energy systems. Buying solar as group reduces the cost by 15-25%; investing in a neighbor's solar system allows people to benefit from solar even if they can't put it on their own roof because of shading, the age of their roof etc. Guide to Community Solar.

5. Smart Appliances. Through the use of smart meters, homeowners will get feedback on their energy use, allowing them to conserve during expensive peak hours, and to see in real time how much energy each appliance consumes. Manufacturers are introducing "grid-aware" appliances that have sophisticated energy management capabilities and timers, enabling the homeowner to gain control over their use.

6. Accessory Dwelling Units. During the recession, the McMansions trend gave way to "rightsizing," and with fewer people moving or building because of financial concerns, many are staying put and building accessory dwelling units. These small detached or attached units can be used for offices, studios, in-laws or rentals, and are the ideal size for energy efficiency and green construction.

As rental units, they help cities increase urban density and restrict sprawl, while homeowners add value to their property. The cities of Portland, Oregon, and Santa Cruz, California, waived administrative fees to encourage this.

7. Rethinking Residential HVAC. Advances in applied building science have resulted in homes that are so tightly sealed and insulated that furnace-less, ductless homes can be a reality. The increasingly popular "Passive House" standard, for example, calls for such thick insulation in walls and ceilings that the home is heated by the everyday activity of the occupants, from cooking to computer use.

8. Residential Grey Water. With water shortages looming in many areas including the Southwest and Southern California, grey water recycling of household wastewater is slowly gaining traction. Benefits include reduced water use, less strain on septic and stormwater systems, and groundwater replenishment. Although many cities have been hesitant to legislate grey water use, some communities have increased the amount of allowable grey water for irrigation.

9. Small Building Certification. 95% of commercial building starts in the U.S. are under 50,000 square feet, but most LEED- certified buildings are much larger. This is in part because of numerous "soft" costs including commissioning, energy modeling, project registration, and administrative time, all of which can be prohibitively expensive for small building owners and developers. Certification programs specifically designed for small buildings are springing up, such as Earthcraft Light Commercial and Earth Advantage Commercial.

10. Lifecycle Analysis (LCA). Understanding the lifecyle of building materials - their effect from cradle to grave - has always been important to green builders. Now that we know how various green building materials perform, the industry is studying the effects of these materials over the course of their entire lives, from raw material extraction through disposal and decomposition.

Even in Energy Star-certified homes, builders are encouraged to bring all ductwork inside the insulated envelope of the house to eliminate excess heat or cooling loss, and to use only small, very efficient furnaces and air conditioners. Geothermal heating and cooling is also gaining broader acceptance. Lifecycle analysts are examining impacts of materials over their lifetime through the lens of environmental indicators including embodied energy, solid waste, air and water pollution, and global warming potential. The results will help architects determine which products really are "green."

N.J. ramps up weatherization program after audit showed mismanagement of federal funds

2011-01-24T02:15:00.000-08:00

By Chris Megerian/Statehouse Bureau

TRENTON — New Jersey’s weatherization program, which has struggled with slow progress, lax oversight and two critical audits, is back on track, Community Affairs Commissioner Lori Grifa said told a Senate committee today.

"These shortcomings have been, or are in the process of being, remedied," Grifa told the Senate Legislative Oversight Committee. "My overarching goal and commitment is to ensure transparency and accountability for every one of these federal dollars."

In an interview later, she said, "With eight weeks of intense supervision, we’ve turned this program around."

The federal program is designed to help low-income families reduce their heating costs while at the same time reduce greenhouse gas emissions and create jobs.

As of September, New Jersey had one of the worst records in the country for completing weatherization projects, according to an analysis of federal data. Since then, production has increased dramatically, from an average of 129 homes per month earlier this year to 711 in November.

But problems remain. Only a small percentage of people who completed a taxpayer-funded training program have found weatherization work. In addition, Grifa said, accounting problems at some nonprofit agencies handling weatherization work have been referred to state authorities for possible criminal investigation.

Federal officials are also watching New Jersey’s progress and will visit the state this week.

"Since the state’s production and expenditures remain below target, the (U.S. Department of Energy) has provided support that reaches far beyond standard oversight procedures," said Jen Stutsman, a department spokeswoman. "This visit is part of a much larger effort to ensure that the state weatherization funds are spent both efficiently and effectively."

President Obama’s stimulus plan includes $5 billion over three years to upgrade 593,000 homes nationwide. New Jersey was allocated $118.8 million for nearly 13,400 homes, although it has only received half the money. It can apply for the rest when it surpasses 30 percent of its target number of homes. Grifa said the state will exceed that mark by the end of the month.

Senate Majority Leader Barbara Buono (D-Middlesex), who chairs the oversight committee, said she wants to ensure the state’s early missteps don’t jeopardize additional funding.

"We need assurances that we’re fixing issues related to this program," she said. "We don’t want to lose an opportunity to put people back to work, to create careers paths in energy efficiency and green technology."

Though the state has increased production, it has not resulted in more jobs. Only seven of the 184 people who graduated from the training program have found work. Another 35 have found work in other fields.

"Clearly the hiring did not take place," Grifa said. "It’s been frustrating."
Grifa also defended a decision to cut funding to seven county and nonprofit agencies that have been handling weatherization work.

"Those actions were not arbitrary or capricious, but necessary to help the New Jersey weatherization program recover from its shaky start," she said. "We have some agencies who are performing remarkably. We have others who are performing abysmally."

Bingaman, Snowe Introduce Bipartisan Tax Package

2010-11-30T18:06:00.000-08:00

October 1st, 2010

BINGAMAN, SNOWE INTRODUCE PACKAGE OF CLEAN ENERGY TAX INCENTIVES; CALL FOR SWIFT ENACTMENT

Advanced Energy Tax Incentives Act is Only Comprehensive Energy Tax Package with Bipartisan Senate Support

WASHINGTON – U.S. Senate Energy & Natural Resources Committee Chairman Jeff Bingaman (D-NM) and Small Business & Entrepreneurship Committee Ranking Member Olympia J. Snowe (R-ME) yesterday introduced a comprehensive package of advanced energy tax incentives that will create thousands of clean-energy and manufacturing jobs; enable American businesses and families to make long-term energy-savings investments; reduce greenhouse gases; and increase U.S. energy security.

The Senators – longtime leaders in developing sound tax incentives for clean renewable energy, energy efficiency and carbon mitigation – are urging their colleagues to take up and pass their Advanced Energy Tax Incentives Act of 2010 (S. 3935) before Congress adjourns in December.

The Act focuses broadly on building and industrial energy efficiency; domestic manufacturing; emerging clean energy technologies; and carbon mitigation.

“We must continue to ensure that the Tax Code contains well-designed incentives that will help us transition to an energy efficient economy,” explained Bingaman. “Our bill will significantly expand domestic clean energy manufacturing; help American businesses and families reduce their energy use and dependence on fossil fuels; and create thousands of jobs. This is a common-sense, bipartisan proposal that deserves priority consideration.”

“For far too long our country’s energy strategy has prioritized the technologies of the past while our policy debate has languished in partisanship. The world is moving ahead with bold action on innovative technologies and it is past time that we set a new course for how we use and think about energy,” said Snowe. “Energy efficiency has emerged as one of the most effective and expeditious initiatives that can be taken to preserve valuable resources for producers and consumers and I believe we can build upon the success of past tax credits with these critical energy efficiency tax incentives, which will spark innovation in our building and industrial sector and afford our constituents and businesses financial incentives to simultaneously reduce their energy bills and invest in our economy. I appreciate working with Senator Bingaman on this comprehensive energy tax package and look forward to enacting these provisions into law.”

S. 3935 incorporates several bills the Senators jointly introduced earlier this Congress alongside numerous new provisions. A summary of its provisions is available online at http://bingaman.senate.gov/policy/aetia_summ.pdf. Among other highlights, S. 3935 would:

*Enable home and business owners to defray upfront costs of investing in energy-saving technologies, including the introduction of performance-based tax credits for whole home retrofits;

*Make $2.5 billion in tax credits available to attract manufacturers of technologies that harness clean renewable energy or enhance energy efficiency, and establish a $1 billion tax credit program to enable American manufacturers to undertake energy-saving measures that advance their competitiveness;

*Facilitate the growth of renewable electricity by creating a tax incentive for energy storage systems, which will enable utilities to deploy intermittent energy sources like wind and solar power while reducing energy demands during peak hours and contributing to an overall more reliable smart grid; and

*Retool the tax credit for carbon capture and storage (CCS) to give CCS projects greater certainty.

Bingaman has said that if the Senate is unable to pass the American Clean Energy Leadership Act (ACELA) – which the Senate Energy & Natural Resources Committee reported on a strong bipartisan basis in 2009 – Congress ought to take up and pass several priority bills. Among these is a bill he wrote with Senator Brownback (R-KS) to create a national Renewable Energy Standard; a bill unanimously reported by the Energy & Natural Resources Committee to address issues related to the Deepwater Horizon oil spill; and S. 3935.

The bill was referred to the Senate Finance Committee. Bingaman and Snowe are senior Members of that Committee, and Bingaman is Chairman of its Subcommittee on Energy, Natural Resources & Infrastructure.

Missouri is prepping a new home energy upgrade plan.

2010-11-05T20:02:00.000-07:00

The Homeowner Upgrades and Geothermal Program (HUG) is going to offer substantial rebates for those who choose to take advantage of it.

This program begins with a homeowner getting a home energy audit from a certified auditor. With this prioritized info in hand the homeowner will make the most cost effective upgrades. If the home improves efficiency by 15% the homeowner will be able to qualify for 50% of the upgrade costs up to $2000. 25% efficiency improvement will qualify the homeowner for a 70% incentive to help cover the costs of the upgrade. Installing a geothermal heat-pump will offer incentives up to $10,000.
This program is funded for $7,000,000 and is expected to have a relatively short life accordingly. 7 million is a lot of money but can used very quickly if the program is aggressively implemented.

Startups bet on solar panels on every home and building

2010-11-05T20:00:00.001-07:00

November 4, 2010

Cleantech startups are expecting that the market for distributed solar energy — installing individual solar panels where power is needed — is going to grow as quickly as the personal computer and cellphone markets.

The most cost-effective way to use solar power is to slap solar panels on individual homes and buildings and provide power at a smaller scale rather than create massive solar panel farms. Large solar panel farms require a lot of money to build and to maintain the transmission lines that move the energy from point to point.

A panel of green technology startup executives made the comments at the GreenBeat 2010 conference in Palo Alto, Calif. The panel included Edward Fenster, co-founder of SunRun, Ron Van Dell, CEO of SolarBridge, and Danny Kennedy, founder of Sungevity.

“That S curve, you’ve been through it with the PCs and cell phones in your pockets, that’s what’s going to happen with this business,” said Kennedy. “We’re in the middle of the tide as it rises, so it doesn’t feel like we’re growing — but it’s going to take off.”

One challenge is to include both the technology to capture the solar energy and convert it to usable electricity in the same box, Van Dell said. An initial surge in growth — including a new source of jobs — will come from research and development of those micro-inverters that turn solar panels into a complete product that both captures solar energy and turns it into a useful power source.

But in order to win solar panels some widespread approval and acceptance, you have to make them sexy, Kennedy said. It’s important to give them the same appeal that Apple creates with its products in order to make consumers more willing to put panels on their roofs, he said.

“We have to learn from Apple — it doesn’t matter what motherboard or modem is in that bundle of components,” he said. “What matters is the service, and that you all feel so cool sitting there with your Mac computers.”

University Study Examines Workforce Growth in the Energy Efficiency Services Sector

2010-10-29T09:34:00.001-07:00

The Lawrence Berkeley National Laboratory in Berkeley, Calif., has published new workforce study based nearly 300 interviews with energy efficiency program administrators, education and training providers, regulatory staff and a variety of employers, trade associations and unions involved in the industry. The study was prepared for the U.S. Department of Energy Office of Energy Efficiency and Renewable Energy.

Energy Efficiency Services Sector: Workforce Size and Expectations for Growth analyzes current EESS job composition and workforce size, and projects future growth in spending and employment in the sector through 2020. Key findings of the study include:

In a high-growth scenario, anticipated spending on energy efficiency in 2020 will require a workforce that is at least four times larger than that in place in 2008. Even in a less likely low-growth scenario, the study’s authors estimate that the EESS workforce will grow by at least two-fold between 2008 and 2020.
The EESS could reach nearly 1% of the national workforce by 2020 and may comprise as much as 3% of the relevant building and construction industry. This is equivalent to nearly 384,000 person-years of employment, translating to approximately 1.3 million individuals engaged in full-time or part-time work.
The anticipated increase means people currently employed in the EESS will need additional energy efficiency-specific training to keep abreast of developments in the field, and new people will need to be introduced to the sector and adequately trained to implement energy efficiency in a reliable and cost-effective manner.
There is a need to inform the building and construction industry of the pending growth in the energy efficiency market. While the largest share of EESS workforce growth (78% percent of the 2020 high-growth scenario) will be in the building and construction industry, many people in the industry are unaware of the pending growth and are focused primarily on more immediate concerns driven by the severity of the economic downturn.
Employment opportunities are not be confined to labor and field positions. According to program administrator, contractor, and ESCO respondents, the hardest positions to fill are experienced energy engineers and management and supervisory positions Shortages of experienced energy engineers and mid-level experienced managers often create bottlenecks that limit growth in the broader EESS.

“At the root of the EESS workforce challenge is the fact that energy efficiency is not commonly understood in the population at large,” the study concludes. “A key challenge is to increase the visibility of energy efficiency. This means highlighting the benefits to the U.S. economy of increased energy efficiency, characterizing the current and potential economic impacts of the EESS, and informing and educating workforce development and labor market professionals on the emerging jobs and occupations that are unique to the EESS as well as the requirements for re-training and professional development of existing occupations so that they can effectively provide energy efficiency services as part of their normal business activities.”

The full LBNL report is available online at http://eetd.lbl.gov/EA/EMP/ee-pubs.html, along with a slide presentation based on the study

Low-income Weatherization Assistance Program Receives Larger Than Expected Response

2010-10-15T06:24:00.000-07:00

More than 1,000 inquiries in less than 48 hours

Kansas City, MO - infoZine - Monday’s announcement of the Green Impact Zone Low-Income Weatherization Assistance Program launch has generated more than 1,000 inquiries in less than 48 hours. The announcement was made at a press conference by U.S. Rep. Emanuel Cleaver II (Fifth District — Missouri) and Kelvin Simmons, commissioner of the Missouri Office of Administration.

Staff members are working diligently to respond to all inquiries, as the program contractor, Zimmer Energy Solutions, gets the program up and running. We ask interested parties to be patient.

Interested persons should be sure that they meet the basic criteria for the program. Eligible applicants must reside in or adjacent to the Green Impact Zone (see attached map), as well as meet certain income requirements. The Green Impact Zone is an area in the urban core from 39th to 51st streets, and Troost to Prospect and Swope Parkway. Full program details are available at www.greenimpactzone.org/energy.

The Mid-America Regional Council received $4.5 million in federal stimulus funds from the Department of Energy and Missouri Department of Natural Resources to weatherize homes in the Green Impact Zone and the surrounding area. Under the program, 659 homes will be weatherized, which will lower residents’ utility usage and help the environment.

Those who do not meet the residency requirements may still be eligible for weatherization assistance through the city of Kansas City, Mo.’s, weatherization program. The Kansas City program is open to residents of Kansas City, Mo., in Jackson, Clay and Platte counties who meet income guidelines. Call the Kansas City Housing and Community Development Department at 816/513-3025 or visit www.kcmo.org/CKCMO/Depts/Housing/HomeWeatherizationProgram for details.

The Green Impact Zone initiative, which uses federal stimulus funds and innovative partnerships to transform these distressed neighborhoods into a sustainable community, has received national attention as a model for place-based strategies to improve the quality of life in declining neighborhoods.

For more information on the Low-Income Weatherization Assistance Program, visit www.greenimpactzone.org/energy or contact Michelle Martin, Green Impact Zone LIWAP Senior Program Coordinator at 816/701-8268 or mmartin@marc.org.

Remodeling or Home Energy Retrfit?

2010-10-12T07:12:00.000-07:00

The Case for a Building Boom

People decide to remodel their homes, not government agencies. Even so, a report released yesterday that argues for infrastructure investment makes a strong indirect case for home-remodeling investments too. (The report, "An Economic Analysis of Infrastructure Investment," was issued by by the Department of the Treasury and the Council of Economic Advisors.)

In his column in yesterday's Washington Post, Ezra Klein wrote that infrastructure investment -- and, by extension, home-remodeling investment -- "creates middle-class jobs for workers in a sector with high unemployment, and it puts them to work doing something that we actually need done at a moment when doing it is cheaper than it ever will be again."
The case:

Construction workers need jobs. In August, construction unemployment was 17 percent. More than 20 percent of the eight million jobs lost in the two years after December 2007 were in the construction sector.
It's cheap to borrow.
Construction materials are priced well below their recent norms.

Plus, there's always this:
Not spending on infrastructure repairs today means having to spend it tomorrow. The same can be said for remodeling improvements.

Stimulus Money Available To Help Winterize Homes

2010-10-11T16:49:00.000-07:00

Funkhouser Seeks Moratorium On Foreclosures

KANSAS CITY, Mo. -- Mayor Mark Funkhouser said he is looking to stop foreclosures in Missouri.

Funkhouser was set on Monday to ask the state attorney general to suspend foreclosures within the state.

Earlier on Monday at the headquarters for the city's Green Impact Zone, Wells Fargo Bank announced it is donating 23 foreclosed houses in the Ivanhoe Neighborhood, which is in the Green Impact Zone. The bank is also donating $172,000 to rehab and weatherize the houses.

In another announcement, more than $7 million in stimulus money will be used to weatherize homes throughout Kansas City. Rep. Emanuel Cleaver said the Green Impact Zone, the first of its kind in the nation, is essential in helping those in need get out of debt.

"Right here in the heart of the city, where people are the poorest, they will be able to spend less money on the very important utility and energy usage," Cleaver said. "We're transforming things here. Cities around the nation are trying to emulate what we have done here."

The goal is to weatherize more than 650 homes. Homeowners wanting more information about the program should call 816-701-8300. Or click on Greenimpactzone.org.

An Industry Breakthrough

2010-10-09T10:09:00.000-07:00

And then the remodeling angels sang, “Remodeling has rebounded and is on the rise,” according to a new report from Hanley Wood Market Intelligence. In an upbeat presentation at this week’s Remodelers Advantage Summit, Jonathan Smoke, senior vice president of Market Intelligence and Research, revealed a slew of data pointing to “significant long- and short-term growth opportunities for the industry.

“We couldn’t be more bullish or optimistic about remodeling,” Smoke said. Among other statistics, he noted that remodeling is indisputably the dominant force in residential construction, given factors including homebuilding’s sharp decline and a wave of “foreclosure renovations.”

Beyond the tremendous percentage jump for replacement and remodeling spending in 2009 (chart), several other “market drives” point to continued growth for remodeling in the years to come. For instance, more than three-quarters of the nation’s housing stock is at an age that needs significant remodeling, Smoke noted.

As for why many remodelers aren't feeling the uptick, Smoke cited continued weak economic conditions in many parts of the country as a principal factor. Plus, he said, "the composition has shifted. If your business has not retooled to new kinds of projects, you may not feel it."

Focus on HOME STAR at Meeting of White House Economic Advisers

2010-10-09T10:07:00.000-07:00

Posted on October 6, 2010, 6:22 pm, by Morris, under News.

At a meeting of the President’s Economic Recovery Advisory Board (PERAB) earlier this week, President Obama reiterated his support for the HOME STAR energy retrofit program now pending in Congress, describing the proposed legislation as a “top priority” for the administration.

“This can have a terrific impact at retail level among small businesses, and among young people who can be trained fairly rapidly to take on this work and to do a terrific job,” the President said in his remarks to the board. “We’re going to push hard,” he added.

Also addressing the status of HOME STAR at the meeting was venture capitalist and PERAB member John Doerr, who introduced the program to the board last December. Here’s an excerpt of Doerr’s remarks this week:

I’m going to give you, Mr. President, and the administration, an update on where we stand on this HOME STAR effort, which you remember is something to create jobs in the hardest-hit of our industries, the construction industry, while at the same time we’re using private capital to save consumers money on their energy bills and deal with our energy-independence problems, so a triple win, all three things going.

And it, after your endorsement, Mr. President, attracted quite a range of support from the Chamber of Commerce, the National Association of Manufacturers, folks also that you might call environmental groups, 3,000 small and medium businesses from every state, and major labor and business organizations.

It’s passed the House. This is really one of those bipartisan bills. And it must pass the Senate. I believe the votes are there in the Senate. They’re looking for, I guess, they call “the right vehicle” to put that bill together.

But I think it’s relevant today because one of the two tracks involves training workers to upgrade their skills and to create a new industry in America, which would be a professional home retrofit industry, and it’s just not very often you get the chance, with a small federal program, to kickstart what I estimate is a $30-$40 billion new American industry whose jobs are never going to be outsourced.

So I know your administration is working very hard to push this forward. That’s our status, and perhaps it could be part of an oil spill bill or some other action before the Congress adjourn

The Housing Crisis and the Coming City Budget Crunch

2010-10-07T11:15:00.000-07:00

The federal government’s single biggest source of revenue is income tax, but cities and towns are primarily funded by sales and property taxes. That means Washington’s revenue took a huge hit in 2008 and 2009, as payrolls declined. But Springfield and Bethesda and Houston? The bust of housing market is just catching up with them.

That’s the conclusion of a report released by the National League of Cities today. Property tax revenue rose 4.2 percent last year. This year, cities expect revenue to fall 1.8 percent — meaning hundreds of billions of dollars less for schools, roads, police officers and other local-government services. And the worst is yet to come.

That is because income tax works directly: You and your employer inform the government how much you make, and transfer a set percentage. But property taxes are based on assessments — essentially guesses about the value of the property. Those assessments take time, and are imprecise. Housing values have been in sharp decline, and continue to fall in many parts of the country, and local governments are only now accounting for that.

The loss of property tax revenue, combined with shrinking sales tax revenue, means that cities will take in 3.2 percent less this year, the biggest downturn since the NLC started keeping track.

“These stark numbers continue the trend we’ve been seeing for the past several years: lower revenue and reduced services at a time when there is an increased demand for services,” the report’s co-author, Christopher Hoene, said in a release. “Unfortunately, because of the loss in revenue, cities will face even more difficult circumstances in the months, if not years, to come.”

Construction Employment Continues To Decline

2010-10-07T11:13:00.000-07:00

ADP Reports A Surprise DECLINE In Jobs

ADP reported a surprise decline in jobs for September. The company said that 39,000 jobs were lost, missing expectations for a 18,000 gain according to Finviz. However, the previous month's jobs decline was reported higher, from a 10,000 loss to a 10,000 gain.

ADP:

The decline in private employment in September confirms a pause in the economic recovery already evident in other data. A deceleration of employment occurred in all the major sectors shown in The ADP Report and for all sizes of payroll. The September decline in employment followed seven monthly increases from February through August. However, over those seven months, the average monthly gain in employment was 34,000. There simply is no momentum in employment.

September’s ADP Report estimates employment in the service-providing sector rose by 6,000 in September, the eighth consecutive monthly gain. This increase was not enough to offset an employment decline in the goods-producing sector of 45,000. Construction employment dropped by 28,000 during September and manufacturing employment declined 17,000, the third consecutive monthly decline.

Large businesses, defined as those with 500 or more workers, saw employment decline 11,000 while employment among medium-size businesses, defined as those with between 50 and 499 workers, decreased by 14,000. Employment among small-size businesses, defined as those with fewer than 50 workers, decreased by 14,000.*

In September, construction employment dropped 28,000. Construction employment has declined for over three years and the total decline in construction jobs since the peak in January 2007 is 2,297,000. Employment in the financial services sector dropped 13,000. Financial Services employment has declined for over 3 years.

You can find the release here.

Homebuilder sees great promise in going green (AUDIO)

2010-10-02T18:25:00.000-07:00

by Brent Martin on October 2, 2010

in Business,Education

A homebuilder believes energy efficiency is the path to reviving an industry hit hard by the recession.

Rick Westmoreland is the founder of Retrofit Exchange. Westmoreland has high hopes for the pilot program being launched by the University of Central Missouri to expand the demand for energy efficiency in residential housing and create news jobs in the construction industry.

“Honestly, I epitomize what’s happened to the housing industry. My day job is I’m a homebuilder. Quite honestly, I haven’t worked much during the day for the last couple of years,” Westmoreland tells the Missourinet. “But what I hope will happen is we can reengage the housing industry into doing some form of construction and maybe re-employ the 2.2 million dislocated housing industry workers across the country.”

The University of Central Missouri received a $190,000 grant to work on energy efficiency in both the metro Kansas City area and the more rural setting around the campus in Warrensburg. The goal is to encourage energy efficiency upgrades at the time of sale in hopes that a new segment of the construction industry would be encouraged to grow. The university is working with several groups in a public-private sponsorship.

Westmoreland says the residential sector is a tougher nut to crack than the commercial sector.

“The residential construction industry is a fragmented industry, always has been. Kind of a cowboy mentality,” Westmoreland says. “Small contractors, small suppliers and really aren’t networked together like the commercial construction industry is.”

Westmoreland says studies indicate that 130 million homes across the country would be candidates for retrofitting. He calculates that a modest $10,000 investment in each of those homes would create a $1.3 trillion industry.

AUDIO: Homebuilder Rick Westmoreland [:25 MP3]

AUDIO: Westmoreland [:15 MP3]

Central Missouri University gets grant to train 'green' workers

2010-09-29T12:05:00.000-07:00

WARRENSBURG, Mo. | The University of Central Missouri is getting a $190,000 grant to train workers to conduct energy audits and update buildings to make them greener.

The Warrensburg school says in a news release that the Missouri Department of Economic Development is providing the grant with federal stimulus money.

One goal is to create a work force qualified to make energy-efficiency improvements, such as adding insulation and installing new windows and doors.

As part of the pilot program, the university will offer courses to the general public in Kansas City and the surrounding region. The unemployed will be one group targeted for training.

The university says that if the program is a success it might be expanded elsewhere.

The 10 American Industries That May Never Recover

2010-09-29T08:37:00.000-07:00

by Douglas A. McIntyre
Wednesday, September 15, 2010

It has become clear that jobs in some industries may never come back, or if they do it will take years or decades for a recovery.

24/7 Wall St. examined the Bureau of Labor Statistics' "Employment Situation Summary," and a number of sources that show layoffs by company and sector. The weakness in these sectors will make it harder for the private industry, even aided by the government, to bring down total unemployment from 9.6% and replace the 8.3 million jobs lost during the recession. The losses in these industries have to be offset by growth in others before there can be any net increase in American employment.

Some of the industries are obvious. Detroit will never employ the number of people it did five years ago. Domestic car sales hit 16 million in 2005 and 2006. That number will be closer to 11.5 million in 2010. More cars and light vehicles are made overseas now, in places like Mexico, to keep labor costs down.
Home construction is another industry that will almost certainly not recover. Home inventories are still extremely high, and home prices have fallen to the levels where they were in 2004. Prices in some markets, which include Las Vegas, Florida and parts of California, have dropped 60% to 70%. New construction in those markets will not begin again in the foreseeable future.

Here is the list of the 10 job categories that will not recover, based on 24/7 Wall St. research:

1. State and Local Government Jobs. The level of unemployment in this sector continues to rise. Budget imbalances in a number of states have already caused mass layoffs as tax receipts have dropped sharply. A recent report by the National Governors Association and the National Association of State Budget Officers found that 22 states furloughed employees and 25 laid off workers during fiscal year 2009-10. As an example, California slashed its workforce by tens of thousands -- some were laid off permanently and some are out of work and may be recalled. Former eBay CEO Meg Whitman, who is running for governor of California, said she will cut the state workforce by another 40,000 and sharply cut pensions for new workers. Forty-six states face budget shortfalls that will total $112 billion for the fiscal year ending next June, according to the Center on Budget and Policy Priorities. Municipalities face similar difficulties as property taxes plummet.

2. Construction. Nationwide construction unemployment was 17% in August, up from 16.5% in the same month last year. Over the course of the summer, government statistics have shown sharp drops in the construction of new homes and apartments. Building permits are also down. Most large housing markets have more than 12 months of unsold inventory on hand. There is also a "shadow inventory" of unsold homes -- those that have gone into foreclosure but have not been put on the market by banks. Foreclosures and defaults are expected to rise another 3 million to 3.5 million this year.

3. Installation, Maintenance and Repair. A set of industries related to housing and commercial construction and maintenance will also not generate new jobs. This is the employment sector the government calls "installation, maintenance and repair." Jobs in this sector are dependent on real estate. While many of the workers in these industries, such as plumbers and electricians, are relatively well paid and many work on homes and commercial buildings, some are mechanics who work on industrial equipment, aircraft and plants. These industries will be more crowded as people with training in related work leave the armed forces with the drawdown in troops in Iraq, which will put downward pressure on wages.

4. Automotive Manufacturing. General Motors has cut over 100,000 people since the beginning of the recession in December 2007. Ford has cut over 20,000 and Chrysler 15,000. This does not include foreign car companies with workers in the U.S. By some estimates, every car company worker layoff leads to three more layoffs in related industries that supply the car and light truck manufacturing business. That includes hundreds of car dealerships that have been closed in the last two years.

5. Pharmaceuticals. This industry has bled workers for three years, and that trend is likely to continue. The largest companies in the sector, such as Pfizer and Merck, have a number of blockbuster drugs that have lost their patent protection in the last decade. They have other pharmaceuticals that will lose that protection in the next decade. Sales of most of these drugs will move to generic companies that will sell them for far less, and erode critical revenue sources for the huge pharma firms. Most companies in the industry admit that they cannot replace the drugs that go off patent fast enough to keep their revenue high. The other reason employment in the sector will stay down and may drop further is that big drug companies are merging to save costs, and most of those costs are people. Pfizer has cut 30,000 people since the start of the recession. Merck has cut 25,000, and these companies and their peers expect that they will have to bring down costs even more.

6. Big Telecom. AT&T, Sprint-Nextel and Verizon have passed their peak employment levels. Employment in the sector will not recover and could shrink for two reasons: (1) The landline business is falling rapidly as home phone users move to VoIP, and (2) Increased adoption of cell phones. The cellular subscription business has been damaged by price wars meant to gain market share in the wireless industry -- one that has stagnated due to a 90% market penetration in the U.S. Sprint made substantial cuts as it posted three years of losses. The most recent was 2,500 people in November last year. In 2008, AT&T said it would lay off 12,000 people. Verizon recently said it would fire 13,000 employees from its land line business.

7. Newspapers. The layoffs in newspapers began in the 1980s as presses became more automated and tens of thousands of pressmen lost jobs. More recently, the changing habits of news consumption have increased Internet readers and hurt print, which has caused more job losses in press rooms. Reporters and editors have lost work as print subscribers have stopped paying for what they can get online for free. One recent study claims that the newspaper industry employee base fell from 767,000 jobs in 1998 to 619,000 jobs in 2008. The U.S. Department of Labor has forecast another 120,000 newspaper layoffs over the next 10 years.

8. Airlines. The number of pilots, flight attendants and ground crew workers is shrinking as consolidation and the recession have hurt the industry badly. Mergers in the last two years, between Delta and Northwest and United's merger with Continental, have decreased the number of large carriers in the U.S. by half. The Bureau of Transportation Statistics reported that the number of airline employees in the U.S. has fallen by 25% since 2001. And the latest merger firings have not yet been announced. Jobs for pilots and flight engineers fell by 30.4% in the third quarter of 2009 to 96,000 from 138,000 jobs in 2008, according to the BLS.

9. Realtors. The National Association of Realtors reports that there were 1,370,758 realtors in October 2006 -- the peak of the market. By the end of 2007, the figure was below 1.2 million. The number is below 1.1 million today and has continued on a downward trend. Home prices have dropped so far and so few homes are sold, that the ability to make money in the business disappears by the day.

10. Bank Tellers. Long before the recession, personal banking had begun to become automated. Over the last decade, banks have provided increasing access to banking accounts online, through call centers and at ATM kiosks. This technologically driven shift has been and will continue to be the chief cause of bank teller layoffs. According the the FDIC, since 2008, at the beginning of the recession, there have been 283 banks closed. Compared to the period 2000 to 2007, when only 27 banks closed, that's nearly 10 times as many bank closings in less than half the time. And as of Aug. 20, state and federal regulators had closed118 banks this year, making it on pace to exceed the 140 banks closed in 2009. Although nearly all of these banks have been acquired by other financial institutions, bank branch closings still occur -- employees and locations are consolidated. The single largest employee group at bank branches are bank tellers, and they will bear the brunt of the continued cost-cutting.

What Do We Do NOW? by Doug Donovan and Jared Asch

2010-09-25T05:44:00.000-07:00

Property Assessed Clean Energy (PACE) programs across the nation struck a bureaucratic brick wall this summer when the Federal Housing Finance Agency (FHFA) issued new guidelines for mortgage-lending practices in areas where PACE financing is available. Citing “significant safety and soundness concerns” arising from the fact that PACE liens typically take priority over mortgage debt in foreclosure proceedings, the FHFA directed Fannie Mae and Freddie Mac—the government-controlled entities that own or guarantee more than half of all home mortgages in the United States—to enact strict regulatory actions that have essentially made it impossible for homeowners to obtain mortgages on properties with PACE liens attached.

PACE lending, an innovative financial model rooted in traditional land-secured municipal finance, allows local governments to issue bonds to help property owners pay for energy improvements, with funds repaid via a special assessment on the owner’s property taxes. The concept has gained widespread acceptance over the past few years at all levels of government, with successful pilot programs launched in California, Colorado, New York, and other states. PACE has been authorized in 23 states and the District of Columbia, with nearly $1 billion in public and private investment, including $150 million in stimulus money allocated by the Obama administration to support the development of PACE financing programs.

The new mortgage guidelines specifically exempt property owners who obtained PACE loans prior to July 6, 2010, but the FHFA has effectively stopped all PACE lending programs in their tracks. Program managers, advocacy organizations, and state and local governments immediately began to call for judicial or legislative solutions that would allow PACE lending to resume, and at the time of this writing, federal lawsuits requesting a reversal of the ruling have been filed by the state of California and the town of Babylon, New York. Meanwhile strategic planning meetings have been organized by Congressman Steve Israel of New York to develop new legislation that would address the FHFA’s objections to PACE liens.

While the suspension of PACE lending represents a major setback to our national clean-energy policy goals, it is important to remember that PACE is not the only solution. Other viable financial models are available to pay for energy improvements, including:

Unsecured private-capital lending programs that allow contractors to provide direct financing to their customers. One example is the GeoSmart Loans from the Electric & Gas Industries Association. These loans are available for amounts up to $25,000 for efficiency retrofits and solar installations, with competitive interest rates, 24-hour approval, and direct deposit of funds. A second example is the Energy Finance Solutions by the Wisconsin Energy Conservation Corporation. Energy Finance Solutions allow contractors to provide financing options directly to homeowners for items including, but not limited to, furnaces, heat pumps, insulation, and appliances.

The Federal Housing Administration’s Energy-Efficient Mortgage program, which allows homeowners to finance energy improvements as part of home purchase or refinance. By working with commercial financial institutions to increase funding, and conducting consumer outreach through real estate professionals and mortgage brokers, this program could be expanded to reach many more American homeowners.

On Bill Financing (OBF) programs that allow homeowners to repay energy improvement loans via a surcharge on their monthly utility bills. This model is being implemented successfully by Clean Energy Works Portland, an Oregon-based collaboration involving local government agencies, three investor-owned utilities, a nonprofit community-development bank, and a nonprofit energy-management organization funded by utility ratepayer surcharges.

Utility Demand-Side Management (DSM) programs that leverage future savings in energy generation and distribution costs. The Austin Energy Residential Power Save program in Austin, Texas, for example, provides direct rebates and low-interest unsecured loans for whole-house energy retrofits to help the utility avoid having to invest in increased generation capacity.

Officials who now seek alternatives to sidelined PACE programs—or who must find ways to repurpose stimulus dollars that were originally earmarked for PACE financing—will find that infrastructure already exists to support these additional financing models, and that other programs around the country have demonstrated their potential for success. Until a solution to the PACE financing impasse is reached, we encourage policy makers, program managers, and home performance contractors to explore the alternatives and engage one another in the process.

Efficiency First board member Doug Donovan is a partner at Interplay Energy in Solano Beach, California. Jared Asch is the national director of Efficiency First, a nonprofit trade association for the Home Performance industry (http://www.efficiencyfirst.org/).

Job-Creation Idea No. 3: The Joys Of Retrofitting

2010-09-25T05:39:00.000-07:00

Let's say you're running a country that's suffering from a terrible jobs crisis -- but you're worried about adding to the national deficit.

Well first of all, you shouldn't be so worried. The best way to reduce future deficits, hands down, is to spur economic growth. And the evidence is pretty overwhelming that spreading a lot of federal money around right now will pay off handsomely down the road.

But let's say that due to the political exigencies of the moment, you insist on hard numbers. You want your investment to pay for itself within a few years and then start reducing the deficit by real, measurable amounts of money.
Have I got the program for you. And in addition to putting people back to work and lowering the long-term deficit, you'll be increasing the country's energy independence, reducing greenhouse gases, and growing a key sector of the economy.

What does all that? A massive investment in retrofitting buildings to make them more energy efficient.

The Home Star program, also known as "Cash for Caulkers," is President Obama's plan to use federally subsidized low interest loans to encourage consumers to make energy efficient improvements to their homes. Legislation to that effect has passed in the House and has stalled in the Senate.
That's a fine idea, but even at low interest, it's hard for some homeowners to make any kind of investment in their homes these days, no matter how quick the returns are going to be.

For the federal government to retrofit its own buildings, however, is truly a no-brainer.

There are lots of ways that adapting to the challenges we face in the areas of energy and climate change could put America back to work; I'll be writing about a new energy economy, a carbon tax, and investing in public transit in the coming days. But I singled out this idea because it has a certain purity to it.

"The one area in the green economy that in my mind is the most fertile right now is retrofitting public buildings," says Bob Pollin, an economist at the University of Massachusetts at Amherst. "The payoff is very, very quick," he said -- as soon as three or four years.

The 2009 stimulus package contained a fair amount of funding for retrofitting, including $5 billion in weatherization services to low-income families, $4.3 billion for high-performance energy upgrades to federal buildings, and $4 billion for the energy-efficiency modernization and renovation of public housing facilities.

But Pollin, who has been tracking the effect of those programs on job creation, says they haven't reached critical mass. "The numbers are still too low, and they're not going to get big unless the government forces them to get big. And the best way to do that is to mobilize the government itself," he told The Huffington Post. "Let's start hiring crews."

It's the economies of scale that really intrigue John A. "Skip" Laitner, director of economic and social analysis at the American Council for an Energy-Efficient Economy. A big commitment to retrofitting government buildings doesn't just create jobs and reduce energy costs, it also provides huge incentives for the private sector to invest in research and technology and infrastructure and labor in ways that will bring the cost of energy efficiency down for everyone.

With the government providing a large, stable market -- "a beachhead, an anchor if you will," Laitner said -- private industry will improve quality, reduce costs and expand operations in a way that it wouldn't have had the confidence to do otherwise.

Laitner sees a government initiative -- something on the order of $20 billion a year -- sparking a burst of investment and competition among performance building design firms, the contractors and architects that feed into them, and manufacturing firms that produce improved construction materials, heating and ventilation systems, lighting systems, controls and wiring, and even turbines and generators "All those things ripple through the economy in very productive ways," Laitner said.

They also speed up the payoff for the government's investment. "The payback right now may be 7 to 10 years, but as the economies of scale begin to kick in, it may be a 4 to 5 year payback," Laitner said.

Pollin says he has some reasons to hope that the idea will capture Obama's attention. For one, the president has already declared the concept of retrofitting "sexy."

Speaking at a Home Depot in Northern Virginia in December, Obama had this to say: "I know the idea may not be very glamorous -- although I get really excited about it. We were at the round table and somebody said installation is not sexy. I disagree..... Here's what's sexy about it: saving money. Think about it this way: If you haven't upgraded your home yet, it's not just heat or cool air that's escaping -- it's energy and money that you are wasting. If you saw $20 bills just sort of floating through the window up into the atmosphere, you'd try to figure out how you were going to keep that. But that's exactly what's happening because of the lack of efficiency in our buildings."

The Vice President is a fan, too. His Middle Class Task Force put out a whole report on the topic of Recovery Through Retrofit.

In an article in the Nation in March, Pollin showed his math:

There are roughly 24 billion square feet of building stock in hospitals and health care, education and government buildings. This is about 20 percent of all US building stock. Retrofitting these buildings would cost about $150 billion. If we assume this program is implemented over three years, at $50 billion per year, this would generate about 800,000 jobs per year over those three years. Retrofits are a highly efficient source of job creation, since all the work must be done within local communities, and a large proportion of the budgets go to hiring workers, as opposed to buying equipment, land and energy.

This government-led project could be the launching point for a larger effort to build the institutional and market support for retrofitting remaining private-sector structures on an economy-wide scale. In addition to private hospitals and schools, the potential market for private retrofits for commercial and residential buildings is in the range of $650 billion. If even 20 percent of these buildings were retrofitted by the end of 2012, it would create another 800,000 jobs per year. Retrofitting alone could thus generate about 1.5 million of the 18 million jobs we need to create by the end of 2012. About 600,000 of them would be in construction, making up for one-quarter of the 2.6 million construction jobs lost since mid-2007.

Trevor Houser, a visiting fellow at the Peterson Institute for International Economics, describes yet another positive effect. Spending just $10 billion a year on retrofitting government buildings, he writes, would not only create up to 100,000 jobs between 2009 and 2011 and start saving the government about $1.6 billion per year on its utility bills, but by reducing overall energy demand would lower energy prices.

As a result, he writes:

$10 billion spent on government retrofits would save the economy as a whole an additional $2 billion per year. Redirecting this money from energy purchases towards the normal basket of household purchases would create and sustain an additional 20,000 net jobs through 2020.

Jobs for American workers, reductions in carbon emissions, increased energy independence, it pays for itself and then offers big savings down the line.

What's not to love?

Only in a town utterly paralyzed by partisanship and hobbled by an inexplicable, self-destructive and short-sighted deficit phobia would it even be a contest.

TOMORROW IN THE AMERICA NEEDS JOBS SERIES: Putting Young People To Work (Want to learn more about the series? Read the overview. Got an idea you think we may have overlooked? Email froomkin@huffingtonpost.com.)

Feds Make Recommendations to Jumpstart Home Retrofit Industry

2010-09-24T09:19:00.000-07:00

On October 19, Vice President Joe Biden and the White House’s Middle Class Task Force released a report highlighting federal strategies to encourage more Americans to retrofit their existing houses to become more energy efficient, thus saving consumers money and reducing the greenhouse gas emissions that cause climate change. “Existing techniques and technologies in energy efficiency retrofitting can reduce home energy use by up to 40 percent per home and lower associated greenhouse gas emissions by up to 160 million metric tons annually by the year 2020,” states the Recovery through Retrofit Report, which was produced by the Office of the Vice President and 17 other federal agencies and offices. “Furthermore, home energy efficiency retrofits have the potential to reduce home energy bills by $21 billion annually, paying for themselves over time.” The report makes policy recommendations to overcome three main barriers to household retrofits: access to information, access to financing, and access to skilled workers.

First, the report recommends that the federal government extend the ENERGY STAR label to retrofitted existing buildings. ENERGY STAR labels are currently used to measure the energy performance for appliances and new buildings. In order to create this label for existing buildings, a standard measurement system would need to be developed to measure the energy performance of existing houses in America. These measures would give homeowners and homebuyers more reliable information about the energy efficiency of their homes.

Second, new financing tools provide incentives for households to undertake retrofits by allowing the costs of retrofits to be paid off in annual installments as part of municipal property tax bills. This addresses owners’ concerns about recovering the costs when the property is sold, because the retrofits would be linked to the property, not the owner. Another option is to expand and improve energy efficient mortgages, to ensure that the value of the retrofit is recognized in the appraisal and to help standardize measures of energy performance. Finally, the report states that federal government should encourage states to adopt state revolving loan funds, which allow homeowners to borrow from private firms at lower interest rates for retrofit projects. These loans are currently available in only 16 states.

The third barrier, access to skilled workers, can be overcome through standardized certification programs and national energy performance standards. Federal agencies such as the Department of Labor, Department of Energy (DOE) and Department of Housing and Urban Development (HUD) should collaborate to develop consistent training and certification programs. High national standards for energy efficiency will motivate training programs to specifically address energy performance in buildings. A steady supply of skilled workers will increase consumer confidence that retrofits will be done properly.

“These recommendations can pave the way for a self-sustaining retrofit market, a market that can reliably cut energy bills while also creating good green jobs and saving consumers money,” says the report. The American Recovery and Reinvestment Act of 2009 (P.L. 111-5) has created an excellent opportunity to fund these suggested programs, as $80 billion in stimulus money is designated for energy and the environment, with an emphasis on energy efficient buildings.

Energy efficient buildings also have been the focus of two recent Congressional briefings hosted by the Environmental and Energy Study Institute (EESI). On October 7, EESI partnered with the Swiss Embassy to highlight the success of the MINERGIE energy performance standard in significantly reducing building energy use, operating bills, and greenhouse gas emissions in Switzerland. On October 14, DOE's Assistant Secretary for Energy Efficiency and Renewable Energy Cathy Zoi joined several other experts to discuss the innovative building technologies and designs available today that can be used in combination to create zero net-energy homes. Currently, buildings account for approximately 40 percent of American energy use and greenhouse gas emissions.

Consultant calls for energy-conscious appraising and lending practices.

2010-09-23T05:08:00.000-07:00

On the Front Lines: David Porter, PorterWorks

By: Jennifer Goodman

EcoHome checks in with former mortgage banker David Porter, owner of PorterWorks, which offers a Green Specialist training program for appraisers, lenders, and insurance professionals nationwide.

First off, what are EEMs and EIMs?
These are loans that credit a home’s energy efficiency in the mortgage itself, giving borrowers the opportunity to finance cost-effective, energy-saving measures as part of a single mortgage. They allow borrowers to stretch their debt-to-income qualifying ratio in order to qualify for a larger loan amount and a better, more energy-efficient home.

An energy efficient mortgage (EEM) is typically used to purchase a new home that is already verified by a third party as energy efficient, such as an Energy Star-qualified home. An energy audit, performed by a certified energy rater, is required to prove efficiency and report expected monthly savings.

Energy improvement mortgages (EIMs) are for existing homes that need an energy retrofit. An energy audit identifies items that will make the home more energy efficient, and the costs of these improvements are added to the mortgage loan. EIMs are available for either a purchase or refinance of an existing home.

EEM and EIM guidelines are different depending upon the type of loan, so be sure the lender you are working with understands the details. FHA, VA, Fannie Mae, and Freddie Mac all have EEM and EIM programs.

Are these mortgages popular with lenders?
The market for these types of mortgages should be very popular considering the fact that out of 128 million existing homes in this country, 95 million need some type of energy retrofit. The average American home is about 35 years old. Insulation wasn’t required until the mid '70s. Energy efficiency wasn’t really considered until the 1990s. Look at all these homes that need energy retrofits and then look at all the refinances we’ve had recently: How many of the owners of those homes were offered an EIM? Not many, and getting an accurate count has been near impossible. It’s a crime.

These programs are not new; they have been around very a long time, 15 to 20 years. Lenders are not offering them because they don’t know enough about them and they don’t think they are necessary. They are not required to even discuss them.

Do lenders take a home’s energy efficiency into account when qualifying a borrower?
No, not at all. Lenders do not look at a home’s utility bill. When you go to buy a house, the lender will consider your income, debt, and your projected house payment and then tell you what you qualify for. They add in taxes and hazard insurance, but they don’t look at energy costs, which can be nearly as much or more than taxes and insurance combined. According to a study done in part by the Institute of Market Transformation, typical annual home expenses include $822 for hazard insurance, $1,897 for real estate taxes, and $2,340 in energy costs.

Lenders really need to start looking at what I call PITIUM (Principal, Interest, Taxes, Utilities, and Maintenance).Whether you buy a 2010 Energy Star home or a 1968 energy-bleeding home, the lender looks at you the same way. I think that is inherently dangerous.

What is wrong with the way houses currently are appraised?
The Holy Grail for appraisers and lenders is “comparable sales” even though they don’t weigh the costs to build the home. The market is not always the best indicator of the value of a home, of what it cost to build. Perhaps comparable sales valuation approach should be tempered with cost considerations.

What can builders and buyers of green homes do to get a fair appraisal and the right mortgage?
First they should require that their appraiser is competent and knowledgeable about green building. Builders, buyers, lenders, and real estate professionals should provide their appraiser with documentation or a CD-ROM that lists the home’s green/energy efficient features, especially things not visible to the naked eye such as advanced framing or blown-in insulation. They can also support the greening of their local multiple listing service (MLS). It’s important that the MLS goes green to help provide evidence that appraisers need to valuate green homes.

What is on the horizon for green mortgages?
Short of a true green mortgage (which does not exist), the closest program is the FHA 203(k). This program can allow you to add both energy and green improvements to a home. There’s a lot more noise about them right now. I believe we will see some changes to the programs in the months to come but I encourage everyone in the industry to ask that their lender learn about these programs and start offering them.

What’s next for PorterWorks?
We continue to provide consulting on greening businesses and training. I will be speaking at various upcoming conferences, including Greenbuild in November and the International Builders’ Show in January

Consumer advocates question Efficiency Kansas Loan Program

2010-09-22T20:02:00.000-07:00

September 21, 2010, 10:19 a.m. Updated September 21, 2010, 7:15 p.m.

Topeka — Westar Energy wants to partner with a state program that would allow homeowners to tap into as much as $20,000 in loans to cover energy efficiency upgrades. Over the years, the loans would be repaid in the homeowner’s electric bill.

The program is part of the State Energy Office’s Efficiency Kansas loan program, which is being funded through federal stimulus dollars.

After completing an energy audit, homeowners can use the money from the loan to pay for such home improvement projects as sealing around windows and doors, insulation, heat pumps, new windows and more energy-efficient air conditioners.

So far, the state has partnered with banks and municipal utilities to dish out the funding to businesses and homeowners. Little interest has been shown in the program, with only about 50 loans made in the year that Efficiency Kansas has operated.

For a $240, one-time charge, consumers would be able to access a loan through Westar and repay it through their energy bill. The utility wouldn’t charge interest on the loan, which banks involved in the program do tack on.
“If our application is successful, we would be the first of the larger utilities in the state to offer the program,” said Gina Penzig, who is manager for consumer services at Westar.

As part of its application to the Kansas Corporation Commission, Westar is also asking to recover direct costs and lost revenue attached with the program. With consumers using less energy, Westar’s profit margins would suffer.
David Springe, consumer counsel for the Citizen’s Utility Ratepayer Board, thinks it is a good idea for Westar to partner with the state. But he doesn’t like the concept of Westar making all its customers cover the lost revenue from lower energy usage because of the home upgrades.

“It’s not going to cost Westar a whole lot of money. And it’s not going to cost the consumer much,” Springe said. “But this is the camel’s nose under the tent. When we start creating hold-harmless cost revenue mechanisms, where does it stop? This is just the beginning of energy-efficiency programs.”
Springe argued that when someone buys a new television or refrigerator that uses more energy, Westar doesn’t offer to give back money to customers. And consumers can decide to save energy on their own or use the Efficiency Kansas program but not go through Westar.

If the state is going to allow Westar to recover the cost of energy savings, then shareholders and investors should have lower rates of return on their money, Springe said.

But Westar thinks it has a right to recover those costs.

The U.S. Department of Energy indicated that in programs where there are measurable and quantifiable energy savings, utilities should have the opportunity to recover the costs associated with those programs, Penzig noted.
“Consumers, both those who are in the program and those who aren’t, are going to benefit,” Penzig said. “We won’t have to generate or purchase as much electricity. And in the long run a power plant doesn’t need to be built,” Penzig said.

Westar didn’t have an estimate on what the program would ultimately cost consumers.

Consider an Energy-Efficient Mortgage

2010-09-22T09:40:00.000-07:00

Would you sign up for a mortgage that qualifies you for a bigger loan with less income and makes the world a greener place?

You might be able to through an energy-efficient mortgage, or EEM, the government loan granted to borrowers who build or upgrade their homes with energy-efficient features. The problem is most consumers either don’t know about the program, which has been around since the early 1990s, or they aren’t taking advantage of it.

Enter the Obama administration. Hoping to push home buyers and owners to act greener, the president is funneling about $50 million to the Department of Housing and Urban Development (HUD) to jumpstart the EEM program. In December, he signed the fiscal year 2010 appropriations bill for a number of federal agencies, including HUD, the Department of Transportation and the Department of Labor – all devoted to clean energy efforts.

What does the new funding mean for home buyers and owners? Not much detail has been released yet; HUD and the Department of Energy (DOE) are still determining how best to position this product so more people take advantage of it, a HUD spokesman says.

One thing the department says it is aiming for is a more streamlined process of obtaining an energy-efficient mortgage – both financially and logistically. The existing program is perceived as complicated and inaccessible. Now, HUD and the DOE are trying to come up with an easier-to-access and less expensive model, says Michael Wolfe, executive director of Energy Programs Consortium, a nonprofit policy group, which is pilot testing an Energy Star mortgage program in several states.

The Federal Housing Administration (FHA), Fannie Mae and the Department of Veterans Affairs all have some version of an energy-efficient mortgage. (There are some differences between the various loans, but the basic ideas are the same.)

But the market in general has been slow to accept and offer EEMs; they’re not widely offered by independent lenders. They’re like rehab mortgage loans, another FHA program that lets a homeowner borrow the funds to both purchase and renovate a home using credentialed contractors, says Wolfe: “A lot of lenders don’t like to do those because there’s more work involved – they have to hold the money in escrow and there are more steps.”

So how does an EEM work?

Borrowers add the money needed to make these green upgrades – say, $5,000 – to the mortgage, even if that means they would exceed the traditional loan limit. Borrowers don’t have to qualify for the expanded loan. And 100% of the cost of the improvements can be financed. The idea: Your mortgage payments are a little higher, but your utility bills drop more. That’s the unique part of an energy-efficient mortgage vs. a regular mortgage: An EEM will count the energy savings as income to the borrower, says Brian Ng, financing coordinator for the Environmental Protection Agency’s Energy Star residential program. It gives the borrower an opportunity to qualify for a slightly bigger mortgage in order to get a more energy-efficient home.

Once you have a lender – be it FHA or a private firm – you need to get an energy rating of your house, which is a comprehensive assessment of the home’s energy use. It considers everything from the types of windows and insulation the house has to the major appliances, including the heating and cooling systems and the building structure itself. The main method of evaluating homes is the called the Home Energy Rating System (HERS), and it must be performed by a certified HERS rater. The rating calculates the energy savings on an annual basis and net present value of savings, says Cliff Majersik, the executive director of the Institute for Market Transformation, a green building nonprofit.

In addition to rating the home’s current level of efficiency, the report lists what energy-efficient improvements can be made and the effect each will have on energy usage. It details the estimated cost of the improvements, the estimated monthly savings and the payback time for savings to equal costs. That savings is counted as income to the borrower – enabling them to stretch their debt-to-income ratio, a key factor lenders take into consideration before approving a mortgage. Just keep in mind that the improvements can be included in a mortgage only if their total cost is less than the total dollar value of the energy that will be saved during their life, according to HUD.

Lenders use the HERS rating to know the value of the home’s new efficiency features. That’s one of the reasons lenders and realtors haven’t promoted energy-efficient mortgages – it involves this extra step of getting an energy rating, says Ng.

Getting a home energy audit by a certified HERS auditor costs anywhere from $300 to $500. Some local utilities and state energy offices offer incentive programs that help pay for a HERS rating on behalf of the borrower. However, where an incentive isn’t available, the audit is a cost that “might discourage borrowers” from actually obtaining an energy-efficient mortgage, says Wolfe. HUD and the Energy Department are working to make this part of the process less expensive, Wolfe says