Jan 21, 2009

AN ECONOMIC STIMULUS PLAN: CUT HOME ENERGY FOR AN INTEREST RATE CUT

Buying a new car more efficient than the one you had provides instant gratification. The new car smell, the glossy dent-free body, the spotless carpeting and, most importantly, fewer trips to the filling station all bring on a little smile.

But making home improvements to cut energy consumption has little immediate impact on your psyche. Few are so proud of their new heating system that they show it off to friends. It’s hard to view additional insulation in your attic with great pride. New, more efficient, windows at least will be clean and open without a struggle. (There’s some gratification there, for a short while.)

Home improvements in energy efficiency may have little noticeable immediate impact on your checking account either. The month after the improvements are done there might be some savings, but, unless you’re keeping track, looking at prior years’ bills taking into account changes in energy costs and including an analysis of therms, heating degree days and kilowatts, the savings in energy in terms of dollars might be hard to detect. There is a payback for energy improvements, but sometimes it’s not noticeable.

But what if there was a government incentive to make energy improvements that would make a significant dent in your mortgage payment along with that less-detectible cut in your utility bill? Would you then make those improvements? What if the government bought down your mortgage at a proportion relative the level of energy improvements made on your house? Would you then do then get up on a ladder and caulk around a window, buy a new air conditioning system? You’d certainly be more likely to.

That is the basis of the Architecture 2030 Challenge Stimulus Plan: Reward homeowners for cutting home energy consumption by buying down mortgages. As the 2030 Challenge puts it, “ The mortgage buy-down would allow a homeowner to reduce their mortgage rate if they renovate and improve the energy efficiency of their home to meet one of the 2030 Challenge targets. Greater energy reductions would earn lower interest rates. The investment in efficiency is low-risk since, with the cost of improvements factored in, the homeowner would save hundreds of dollars on a typical monthly mortgage, plus hundreds more in reduced energy bills.”

The Challenge Plan calls for new and existing buildings to meet energy consumption reduction targets, below an established benchmark, of 30 percent, 50 percent, 75 percent and carbon neutral.

The Obama Administration (as it has been already) will be looking immediately into ways to crank up the stalled economy. Since the problem in the economy began in the housing sector, it seems that the cure could also be in the housing sector.

The 2030 Challenge Plan calls for a total federal investment of $192.47 billion over two years. That investment, the Plan says, would create over 9 million new jobs and $1 trillion in direct nonfederal spending in just two years while opening up a brand new $1.8 trillion renovation market. That energy efficiency renovation market would include project planners, tradesmen and materials suppliers. Every portion of the building sector is now hurt by the slow economy. Building renovations for energy efficiency would put most of those back to work and paying taxes to return the investment to the government.

The Plan is estimated to save consumers $132 billion to $208 billion in energy costs and mortgage payments over a five-year period. That’s money that can be used for other things like buying that new more efficient car.

The federal investment called for in the Plan complements the Weatherization Assistance Program and builds upon the Energy Efficiency and Conservation Block Grants program authorized by Congress last year. These grants will allocate funding for training local officials, auditors and consultants, a revolving low-interest loan fund, conducting free (or reduced-fee) audits based on income levels, developing education and outreach programs, fast-track permitting, incentives for efficiency products made locally and conducting upgrades to local government buildings.

The 2030 Challenge also calls for a commercial building accelerated-depreciation program for buildings other than homes that meet the energy reduction targets.

Architecture 2030, the nonprofit research organization, is supported by organizations such as the US Conference of Mayors (USCM), Department of Energy (DOE), Environmental Protection Agency (EPA), US Green Building Council (USGBC), American Institute of Architects (AIA), American Society of Heating, Refrigeration and Air-Conditioning Engineers (ASHRAE).

Courtesy of Green Energy News

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