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Retrofit Revolution

Weatherization and energy upgrade projects are ramped up by the first slice of stimulus pie, with more funding to come.

03/2010

By David Sokol

In mid-January, the Council of Economic Advisors released its second quarterly report monitoring the impact of the American Recovery and Reinvestment Act of 2009. As of the close of December 2009, approximately $413 billion of $787 billion had been passed along to residents and businesses in the form of tax reductions and project commitments. And of that figure, $31 billion had been obligated to clean energy provisions, with the council estimating that another $60 billion or so will be destined for sustainability efforts.


Illustrations © Brian Stauffer
Enlarge Graph
Stimulus spending for green energy and efficiency
Clean-energy investments vs. fossil fuels

Top: Data from Booz Allen; Middle: The Congressional Budget Office; Bottom: The U.S. Commerce Department

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Walk into any Home Depot or Lowe’s and you’ll see evidence that the $31 billion really is boosting the economy, and to greener ends. At the chain hardware stores, advertisements for energy-efficient windows and doors and other weatherization measures are tapping into the revised tax credit for energy-efficient existing homes: Under the Recovery Act, the individual tax credit for energy-efficient improvements has been raised from a 10 percent preexisting baseline to 30 percent in 2009 and 2010, with an overall cap of $1,500.

Skilled men and women have to be hired to install that weather stripping and insulation, and job numbers align with the increasing purchases. The Council of Economic Advisors also reports that, as of the conclusion of 2009, the Recovery Act was responsible for creating 63,000 new jobs related to sustainability. Of those numbers, Jason Hartke, director of advocacy and public policy at the U.S. Green Building Council  (USGBC), says he’s witnessing a “retrofitting revolution” thanks to this tax credit and to other Recovery Act programs focusing on green retrofits, such as the Weatherization Assistance Program, State Energy Program, and Energy Efficiency and Conservation Block Grants.

In November 2009, Booz Allen Hamilton released a report commissioned by the USGBC stating that green construction spending currently supports more than 2 million jobs, generating in excess of $100 billion in gross domestic product and wages. By 2013, 8 million green-collar jobs are projected; clearly the Recovery Act is contributing to that phenomenon.

To be sure, the direct relationship between the stimulus package and jobs has been debated. Shortly after the October announcement that the Recovery Act had created or saved 640,000 jobs, the federal watchdog charged with overseeing the stimulus, Earl Devaney, chairman of the Recovery Act Transparency and Accountability Board, testified that the data were mistaken. Outside sources have quickly unearthed inaccuracies in the government reporting, too: For example, the Birmingham News found that one Alabama housing authority claiming that a $540,071 grant would create 7,280 jobs, only spawned 14 jobs as a result of the additional funding.

In the realm of green-collar jobs, avoiding the kinds of misstatements that have plagued jobs data generally requires due diligence, says Matt Rogers, on whose shoulders that responsibility partly falls. Rogers is the senior advisor to Secretary of Energy Steven Chu. He assumed Recovery Act implementation for the Department of Energy (DOE) the day it was signed into law. Among other programs, the DOE oversees weatherization, state energy programs, and block grants; the total value of the three initiatives alone is approximately $10 billion.

“We had to get a lot of money out the door in a short period of time,” Rogers admits. In order to ensure its best use, the Recovery Act charged the DOE to funnel funds through existing structures, namely the State Energy and Weatherization Assistance programs. The all-new Energy Efficiency and Conservation Block Grants—which supplies grants funds to state and local governments, tribes, and territories for projects that reduce energy usage and fossil-fuel emissions—on the other hand, required exercising extreme, albeit timely, care. “The program was modeled on a set of Housing and Urban Development programs providing aid to cities, but it involves a wholly new set of requirements for those cities,” Rogers explains. “They had to give us a plan for scaling up.” Approximately 2,400 plans were submitted for consideration, in response to which 125 employees were convened in the DOE’s basement to process applications over a period of six weeks.

Referring to the myriad grant applications, Rogers continues, “Plans enable us to hold recipients accountable for performance; each locality has essentially signed a contract with the DOE to deliver a certain number of energy-efficient buildings or put in a certain amount of renewable capacity [into the grid].” The DOE checks those goals in quarterly reports submitted to federalreporting.gov (the DOE plans to implement a monthly reporting requirement), and it performs a sample of field visits, deputizing auditors from cities and adjunct federal departments like HUD to fill in the gaps.

Like the DOE, the General Services Administration (GSA) is taking similar steps to ensure that Recovery Act monies are wisely spent, much of it on green retrofits. The GSA was granted $5.55 billion, $4.5 billion of which is to be applied to green buildings. “We found that we had more than enough shovel-ready projects to choose from, so we picked the ones that are most sustainable,” says Kevin Kampschroer, director of the GSA’s Office of Federal High-Performance Green Buildings, adding that $2 billion has already been apportioned.

Kampschroer explains that the GSA, too, is monitoring schedules and deliverables, like it would manage any other project, which includes job creation. “The thing that is new is we’ve put into place a sweep of measures to make sure the sustainability component is delivered.” In response, the GSA has attached a recommissioning report to each project, in order to establish a baseline against which minimum performance criteria can be assessed.

Kampschroer and Rogers expect accelerating green-job creation through the first two quarters of 2010, now that the Recovery Act implementation plans of their respective federal departments and local partners are finalized. (In a February 16 report, the DOE inspector general, Gregory Friedman, claimed that weatherization efforts have been acutely slow in getting underway.) Both also say that funding of the green construction industry is being tailored for economic sustainability that will outlast the Recovery Act itself. Due to construction timetables, for example, many of the GSA projects will be completed just within a required five-year limit; beyond that, those green buildings should demand the hiring of differently skilled building operators. Meanwhile, the Weatherization Assistance Program focuses on low-income housing because, Rogers explains, “We’re trying to demonstrate to the American public that energy-efficiency investments are high-return investments.”

Accomplishing that task, and providing a strong foothold for the retrofitting revolution, should allow it to more widely disseminate among middle-class homes and the private marketplace.

Retrofits and renovations may drive the bulk of the Recovery Act’s green-collar jobs since, as the USGBC’s Hartke says, “Traditionally there hasn’t been much focusing on retrofitting.” And with so much focus on residential buildings, the big winners in this realm are contractors and utility companies who are largely responsible for installing those Home Depot purchases and performing energy audits.

Although the Recovery Act does not neglect the design community—“Even replacing a roof with one with a solar array requires designing the electrical junction,” Kampschroer says of the GSA’s Recovery Act spending—architects may not tap into its opportunities as immediately. SmithGroup partner Greg Mella, AIA, who sits on the AIA’s Committee on the Environment advisory group, says architects specializing in sustainable government buildings are benefiting from Recovery Act spending right now. But just as Rogers expects middle-class households to embrace weatherization once the Recovery Act has concluded, Mella views the Recovery Act as engendering a whole retrofit culture that will more slowly trickle down to the profession at large.

To prepare for it, he says, “Architects really do need to be well versed in sustainable design and understand the carbon implications of architectural decisions. They have to follow the market.”

And they have good reason to do so. Even as retrofitting gains traction holistically, the pending Home Star weatherization program, sometimes referred to as “Cash for Caulkers,” may provide another boost to the revolution. The $6 billion federal program would reimburse residential energy upgrades. Although the new stimulus has not been signed into law, some version of it is very likely to be realized in the wake of President Obama’s State of the Union address, which spotlighted the massive weatherization effort as an impetus for job growth.  

This article appeared in the April 2010 print issue of GreenSource Magazine.

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