Recent quarterly reports provide promising news for the clean efficiency industry. Many major providers of renewable energy services, including Johnson Controls and Ameresco, have reported significant increases in net sales and revenue. Other energy efficiency businesses have also experienced tremendous growth and the expansion of production in recent years.

Several factors have enabled the increased market activity of energy efficiency companies. High energy prices have prompted companies to search for most cost-effective ways to generate energy. Additionally, federal incentive programs encourage sustainable renovation of industries and the implementation of energy efficient practices.

Consumer demand for sustainability and a growing understanding of the benefits of energy efficiency have also influenced both corporate decision-making and public policy initiatives. In regards to the real estate market, homeowners, companies and policy makers are recognizing the increased value that green upgrades add to homes. Finally, increased demand for sustainable programs for municipalities, schools, universities and hospitals has also contributed to the rapid growth of the industry.

All of these factors have compounded to make the energy efficiency industry a stronger sector in the national economy. The performance of the energy efficiency market in recent quarters is a hopeful sign for members of the market and for those who advocate sustainability and efficient energy consumption.

For more information on Johnson Controls’s quarterly reports click here.

For Ameresco’s quarterly reports click here.

If innovations are paired with stronger energy policies, the country will add $244 billion to the GDP and nearly 2 million jobs while saving home energy costs by $995 per household.

Check out their website here: http://www.google.org/energyinnovation/
And the full report here: http://www.google.org/energyinnovation/The_Impact_of_Clean_Energy_Innovation.pdf

Source: Forbes

By amending the 1978 Public Utility Regulatory Act, the bill, also called “e-Know”, aims to provide a way for electricity consumers to more easily find out about their energy usage and how much it saves (or costs) them. In support of the proposed legislation, DSRG quoted a 2006 study which shows that direct and indirect energy information feedbacks produce savings in the range of 5-15 percent.

A 2010 report by the American Council for an Energy-Efficient Economy described similar results, with homeowners “taming the tiger” of energy use by 4 to 12 percent via the use of informational feedback programs, in addition to smart metering.

In other words, says DSRG, consumers who track their energy consumption in real time save $60 to $180 per year – an argument used by the Sierra Club to oppose a Maine group attempting to block installation of smart meters and also in 2009 when Google and the California Public Utilities Commission went to work on the state’s Smart Grid System.

The e-Know legislation would empower consumers to obtain electricity-use information from electric utilities, including those agencies working on behalf of utilities offering home energy management systems, and would insure that the information gleaned could be technologically neutral. That is, consumers would be able to choose how they got that information and how they used it. For consumers, who choose to manage their power usage, it may be the difference between turning the thermostat down for an added degree of summer comfort or choosing lighter clothing. For the nation as a whole, it may be the beginning of serious energy conservation that allows utilities and public service regulators to step back from uncertain, foreign energy supplies and dangerous or polluting electricity generation technologies. The potential for energy efficient savings for one and all is limitless.

It is also hoped that this act will facilitate the introduction of smart grids to modernise the nation’s electricity system, including facilitating demand response programs which are aimed at minimising the effects of an aging North American power grid – effects which are particularly troubling when trying to integrate renewable technologies or keep pace with new developments in the digital information and telecommunications network.

If the legislation is implemented, home energy contractors can avail themselves of the most up-to-date energy usage information and plug it into software that accurately and precisely predicts exact savings from any retrofit.

Source: Smartmeters.com

The report was based off of findings of the Arizona Energy Efficiency Standard (EES), which requires Arizona investor-owned utilities to achieve 22% total energy savings by the year 2020. The report takes a deeper look into the comprehensive business model and what could come with the achievement of the EES.

Check out the full report here: http://eetd.lbl.gov/EA/EMP/reports/lbnl-4399e.pdf

Recurve is all over ACI again this year. Here are the sessions and other places you can catch us at. We would love to talk to you!

TUESDAY MARCH 29

Home Energy Summit

8:30am-10:00am
Engaging Markets and Private Capital To Achieve Our Long-Term Goals
Matt Golden, Recurve’s President and Founder, will be kicking off the second day of the Home Energy Summit, which includes heavy hitters such as Katherine Hogan of the DOE, Dian Gruenich formerly of the CPUC, and Commissioner Karen Douglas of the CEC.

2:45pm – 4:00pm
Breakout Session: Effects of Program Design on Delivery by Contractors
Adam Winter, SVP and cofounder of Recurve, will be co-leading a breakout session along with folks from WellHome, Distinct ENERGY Performance, and more.

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WEDNESDAY MARCH 30

1:30pm-3:00pm

Beyond Your Certification
Matt Golden will be helping session attendees plan a successful business strategy post-BPI certification. Joining him will be Tiger Adolf of BPI, Courtney Moriarta of WellHome, and Sam Flanery of Michigan Energy Savings.

3:30pm – 5:00pm

Optimization of Performance Financing Through Innovation
Another appearance by Matt Golden, this time alongside Sammy Chu of Long Island Green Homes and Dan Kartzman of Powersmith, to speak about LIGH program’s integration with Recurve Software and Powersmith home energy upgrades as an example of program design success.

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THURSDAY MARCH 31

10:30am – 12:00pm

Energy Upgrade CA: Game Plan for Market Transformation
Another breakout that Matt Golden is participating in, this time teaching attendees about how the Energy Upgrade California program is leveraging federal stimulus dollars to grow the building performance industry and create jobs, while addressing the typical challenges that programs face. He’ll be joined by Leif Magnuson of the EPA and several others directly involved in the program.

1:30pm – 3:00pm – in the foyer of the exhibit hall
Join Chris McClellan, Sales Manager at Recurve, for an in-depth demo of Recurve Software. He’ll show you how Recurve Software helps you do more energy audits every week, generate accurate savings predictions, and present polished reports and proposals on-site. At the end of the demo, he’ll also be giving away a tablet to one lucky winner! So be sure to visit us on the tradeshow floor at booth 601 to sign up for a free trial of Recurve Software and enter the contest.

3:30pm – 5:00pm (a very busy timeslot for us!)

National Policy Update
Yet another session with – you guessed it – Matt Golden! Get an update on current national and state trends in public policy, including HOME STAR, utility data access, ARRA funded programs and California state financing recommendations for programs in wake of PACE. The session will also cover how contractors can get involved in upcoming program opportunities. Other presenters include Stephen Cowell of CSG,, Rick Gerardi of WellHome, and Kara Saul-Rinaldi of the National Home Performance Council.

A Hard Look at Software: The End Users’ Perspective (Panel)
Chris McClellan will be discussing how software can help you streamline your business operations while increasing sales and improving quality of service through real-life examples of how users have successfully integrated various software solutions into their day-to-day operations. Chris will be joined by Skye Dunning of Building Performance Specialists and Elise Brown of Evergreen Home Performance.

Selling Home Performance: Where Mastic Meets the Sheet Metal
Jason Bowers, Recurve Local Operations General Manager, will be teaching contractors how to increase close rates and sell larger work scopes, along with Casey Murphy of ICF International and Eric Howarth of EGIA.

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Don’t forget to come visit us for a software demo, to enter our contest (we’re giving away THREE tablets!) or just to say hello on Wednesday & Thursday during the tradeshow hours. We’ll be holding down Booth 601.

Many contractors are asking what happened to Home Star, the proposed legislation that would have extended rebates to homeowners who invested in energy efficiency upgrades for their homes. While the bill was a hot topic for much of 2010, it ultimately failed to pass in the Senate, and has not been reintroduced in Congress so far in 2011.

This article includes a brief history of the legislation and explanations from industry members as to why it did not become law last year. However, the Obama administration has recently begun to tout the Home Star program, and there’s a chance it may return to the Hill. Yet industry leaders are also looking to alternatives to aid the HVAC industry.

HOME STAR HISTORY

While various versions of the Home Star bill were introduced in Congress, the most significant was House Resolution 5019, known as the Home Star Energy Retrofit Act of 2010. H.R. 5019 was introduced in the House in mid-April 2010. It was sponsored by Rep. Peter Welch, D-Vt., and included 44 cosponsors.

This version of the Home Star legislation would have created a program to provide $6 billion in rebates to homeowners who upgraded the energy efficiency of their houses through measures ranging from attic insulation to furnace replacement. It was structured as a two-tiered system with the lower tier providing money for simple replacements and upgrades, and the higher tier providing more money for homeowners who undertook whole-house renovations for energy reductions.

The Silver Star portion of the program, which offered a maximum rebate of $3,000, would have given rebates for smaller-scale projects, such as air sealing and replacing old heating/cooling equipment with new high-efficiency models. The Gold Star rebates, which would have maxed out at $8,000, were intended for whole-house energy reduction and would have required software simulations comparing the energy use of a home before and after retrofits.

The House passed this bill on May 6, 2010, by a 264-161 vote. After the House passed its version of the bill, it was referred to the Senate.

During this phase of the legislative process, many in the industry raised concerns about certain aspects of the bill. Specifically, the Air Conditioning Contractors of America (ACCA) expressed its disapproval of the bill’s accreditation requirements for contractors. In order to perform the whole-home retrofit work under the Gold Star portion of the program, Home Star would have required contractors to be accredited by the Building Performance Institute (BPI) or an equivalent alternative certification. In response, ACCA announced it could not endorse Home Star because of the limited number of contractors eligible nationwide to perform Gold Star work. Others in the industry pointed out that the bill did allow for alternatives to BPI certification, and asserted that the bill would aid the industry overall.

While the Senate did not immediately choose to consider the bill, in late July, Majority Leader Harry Reid, D-Nev., included a version of the Home Star bill in a larger energy package known as the “spill bill.” This Senate bill, S. 3663, was more far-reaching and included a response to the BP oil spill.

However, the Senate version of the bill was also controversial because of the way it proposed to handle the rebate process. While the House version of the bill sent the rebate money directly to the consumer, the Senate version of the bill required contractors to apply for the rebates after performing the work.

Ultimately, although the bill was read in the Senate and vigorously debated in the HVAC and home performance industries, it was referred to committee and never brought to the Senate floor for a vote.

WHY HOME STAR FAILED

Many in the industry have noted that the political dynamics on the Hill led to the bill’s failure. “From a politics standpoint in the Senate, it was very difficult to move any legislation last year, especially standalone bills,” said Matt Golden, president of Recurve (San Francisco) and policy chair for the home performance trade association Efficiency First. “We [Home Star] were in the spill bill, and the spill bill didn’t pass. At the end, we were at the mercy of Senate politics.”

According to Dale Harbour, vice president and general counsel, Residential Solutions, Ingersoll Rand, the biggest roadblocks to Home Star’s passage were money and timing.

“It was really a jobs program, and it was something that had been introduced by a Democratic-controlled Congress prior to the [mid-term] election, and it had some level of bipartisan support,” he explained. But, he said, “Its biggest issue was that there was not a mechanism to pay for it.”

Because the bill was not deficit-neutral and did not include corresponding cuts to allow for the funding of the Home Star rebates, Harbour said, “It never gained any traction in the Senate.” He continued, “It was more of a timing issue than anything else in terms of when that was introduced. It was relatively late in the game, and it was at a point in time where there were questions about the extent of the success of the stimulus package that was passed in the very early tenure of [the Obama] administration.”

WHAT’S NEXT?

Since Home Star failed to pass in the Senate last year, it was never sent to the president’s desk to be signed into law. However, this year President Obama has again called attention to the proposed program. Following his State of the Union address in late January, the White House issued a press release that promoted the Home Star program as a way to protect consumers against rising energy bills. The president then included funding for Home Star in his budget proposal for fiscal year 2012. According to the White House, Home Star is intended to be part of the president’s larger goal to establish a Clean Energy Standard (CES) for the country.

Despite the Obama administration’s promotion of the program, some doubt that Home Star would be well received in Congress this year. The main reason is that the bill carries a $6 billion price tag, and the new focus on the Hill is centered on fiscal responsibility.

“The Home Star program as originally proposed had strong financial incentives to upgrade the energy efficiency of homes. As such, it was also a very expensive program. While it may be an effective job creator, for it to have a good chance of passage, in my opinion it will require mechanisms to pay for the program that are at least deficit neutral,” Harbour said. “Without corresponding spending cuts, I think it faces an uphill battle in a Congress increasingly focused on deficit reduction.”

According to Golden, many in the industry are now moving ahead with other initiatives. “We continue to look at a number of possible options to help this industry in Congress,” he said. As an example, he cited the Department of Housing and Urban Development’s (HUD) PowerSaver loan. The loans made available by this pilot program are backed by the Federal Housing Administration (FHA) and offer credit-worthy borrowers low-cost loans to make energy-saving improvements to their homes. “We are engaged in making it a more contractor-friendly product,” Golden said.

In terms of larger bills to support the industry, Golden said there may be a chance for a jobs bill. “We need to have help for construction,” he said. “We’re still at 20.7 percent unemployment and getting worse, and that’s really why the president is still looking at it.”

He continued, “All I can say at this point is there’s a feeling on the Hill that something needs to done for construction and manufacturing. There are aspects of the construction industry that are economically depressed — working together, with Congress, we can turn around those economics with sound policy and get people back to work building better buildings.”

Whether Home Star is reintroduced in Congress or other alternatives are proposed to aid the industry, there is no doubt that energy efficiency will continue to stay in the limelight. Contractors who prepare by achieving and updating their third-party certifications, and by working with third-party verification providers, will be well equipped to take advantage of any new initiatives in the future.

Source: ACHR News

President Obama endorsed these provisions during today’s announcement in support of modifying the commercial building tax credit. The bill included a key provision increasing the 179D tax credit deduction from $1.80 per square foot to $3.00 per square foot, which President Obama said he supports. The bill also clarified Congressional intent to allow a partial deduction pathway for new and existing commercial buildings.

Senator Snowe said: “At a time when energy prices are increasing and unemployment in the construction industry is at 20.7 percent, incentivizing energy efficiency construction in our building sector simultaneously creates jobs while addressing our nation’s energy crisis. As the sponsor of the Expanding Building Efficiency Incentives Act last Congress with Senators Feinstein and Bingaman, I strongly support the President’s recognition of this vital opportunity to expand and simplify the energy efficient commercial building tax credit and I look forward to working with the Administration to enacting changes of the existing tax credit into law. The fact is tax incentives can effectively catalyze investments in advanced insulation, windows, HVAC systems, and other technologies that can be incorporated into America’s commercial building infrastructure that address 20 percent of America’s demand for finite and expensive energy resources. Moreover, energy efficiency is the most cost-effective investment in America’s energy security so we in Congress must develop tax policies that will assist America’s factories, homeowners, and building owners to reduce their energy bills.”

Senator Feinstein said: “The president today began to flesh out how we’re going to reach the energy efficiency goals he announced last week, and I’m encouraged by his plan. His idea to expand and simplify the Commercial Buildings Tax incentive parallels legislation I cosponsored last year with Sens. Snowe and Bingaman, and I think Congress should begin to debate this plan as soon as possible. We must wean ourselves off fossil fuels and encourage actions that will reduce the effects of climate change, and energy efficiency will play a significant role in that process. Today’s ideas are designed to encourage the private sector to invest in technology that will move us in that direction, and I’m eager to work with the president to make these a reality.”

Senator Bingaman said: “I am pleased that the White House continues to push for incentives for businesses and homeowners to improve energy efficiency, and I look forward to continuing to work with my Senate colleagues on creating and enacting legislation that can achieve these efficiency goals. Much of the President’s proposal echoes legislation that Senators Snowe, Feinstein and I developed in the last Congress, which would have simplified and enhanced incentives for commercial buildings and provide tax credits for the training of home retrofit professionals. Residential and commercial buildings in the U.S. account for 39 percent of our nation’s energy consumption and 38 percent of its greenhouse gas emissions. Low-cost, common-sense solutions like improved insulation, efficient lighting and more efficient heating and cooling exist today, and they work. Equally important, the good American jobs that will be created by a major retrofit of our buildings cannot be exported.”

The Expanding Building Efficiency Incentives Act of 2009 includes the following provisions:

• Energy Efficient Homes (Section 45L Credit). Currently, energy efficient homes that are 50 percent better than code with respect to heating and cooling costs receive a $2,000 credit. The credit has been lauded as a major success by both homebuilders and energy efficiency groups with increasing market share and moving the industry to a point where in 2008, 4.6 percent of all homes sold in the U.S. qualified for the tax credit. Under the bill, this credit would be extended through 2012. In addition, the bill would create a higher standard for energy efficient new homes that are 50 percent better than code with respect to heating, cooling, water heating, lighting, and appliance energy use. These homes would receive a tax credit of $4,000 and the credit would be in place through 2013.
• Energy Efficient Manufactured Homes (45L Credit). Energy Star manufactured homes are also eligible for a $1,000 tax credit. Low-income families spend a disproportionate amount of household income on energy, and this credit will spur energy efficient manufactured housing for these families. Under the bill the existing tax credit would increase to $1,500, and a new tier would be created for $2,500 for the new Energy Star standard that will take effect in 2010 and be significantly more stringent.
• Energy Efficient Low Income Housing. The Low-Income Housing Tax Credit Program is an economic incentive to produce affordable housing, where federal housing tax credits are awarded to developers of qualified projects, who either use or sell the credits to investors to raise capital for housing development projects. Over 2 million units for low income families and seniors have been constructed and preserved since 1987. However, there currently is not an incentive to make these buildings energy efficient. This legislation would provide an additional 50 percent tax credit of the current new homes tax credit if the building qualifies for the Low-Income Housing Tax Credit.
• Energy Efficient Commercial Building Tax Credit (Section 179D). Currently, an incentive is provided through a $1.80 per square foot tax credit for a building that is 50 percent better than code with respect to building envelope, lighting, and the HVAC system. In addition, there is a partial deduction for any one of the three components above of 60 cents per square foot. This legislation would build on the existing credits and increase the deduction to $3 per square foot and a partial deduction to $1 per square foot.
• Energy Rating. The bill also includes a tax credit for an individual to undergo an energy rating, or energy audit, to determine what energy efficiency investments are necessary. This industry is developing in the State of Maine, and with a third of all Maine homes constructed prior to World War II, there is a substantial amount of savings that are possible with advanced energy ratings. The tax credit is equal to $200.
• Energy Rating Training. The bill includes a $500 tax credit for training expenses of an individual to become an energy rater. As mentioned above, it is critical that the individuals who perform these energy audits are well trained and provide recommendations that are cost-effective.

Source: Efficiency First

New economic analysis shows that clean energy legislation will create up to 1.9 million new jobs, increase annual household income by up to $1,175, and boost the GDP by up to $111 billion. Over the years, study after study, from groups like the Center for American Progress and the American Council for an Energy-Efficient Economy, have supported the direct correlation between green industry growth and jobs. Eighteen months ago, findings from a study by the Pew Charitable Trust found that green jobs are growing at a national rate of 9.1 percent, while traditional jobs are growing by only 3.7 percent.

Investing in energy efficiency is a win for homeowners, out-of-work construction workers, the economy, and the environment.

Green technologies are languishing because of a vicious circle in the economy: consumers have a hard time identifying products that truly are better for the environment, and find it difficult or unnecessarily expensive to buy them even if they can find what they want. This leads to frustration, and the frustration leads to the mirror image of the problem among manufacturers and retailers: if consumers are not expressing their desire for green purchases in the market (even if it is because they can’t find or identify them), then it makes no sense to produce or stock them.

Goldstein then makes a strong argument in favor of government incentives for home energy retrofit measures:

For home remodels, imagine how competitive home energy retrofit contracting would become if there were financial incentives for the first homes to make savings? (Such incentives passed the House of Representatives with bipartisan support in the form of the Retrofit Energy Efficiency Program (REEP) which was part of the Waxman-Markey climate protection bill last session.) How much easier would it be to retrofit your home for energy savings if your bank allowed you to borrow the money for the retrofit at the same interest rate as your existing mortgage, and to do it even if your loan is underwater?

Performance-based incentives and standards provide the economic motivation for innovation in many areas where it is blocked in the real-world economy. Places that have relied more heavily on environmental protection have seen greater job creation and more economic growth than those that have not.

This is a true win/win: a cleaner environment and the only known way to encourage innovation and growth on a national scale.

Read the full post at www.switchboard.nrdc.org/blogs/dgoldstein/innovation_as_the_basis_for_am.html

Source: Efficiency First

The study found that the vast majority of programs (90%) are sponsored by municipal or investor-owned or utilities, with most (86%) providing some kind of incentive or rebate to homeowners. Just over half of the programs (52%) offer homeowners free energy audits, most requiring program-specific or BPI certification for auditors. Only 18% of the programs use the auditor-contractor model in which audits are performed by the same contractor who will do the work. Most of the remaining programs (75% of the total) require auditing to be performed by a third party.

“This is a time of tremendous change and growth for the energy efficiency retrofit industry,” NHPC Managing Director Robin LeBaron said in reference to the report. “In five years, the field will look very different than it does now. This study provides a baseline for us to study how the field evolves.” The organization announced that it plans to issue a follow‐up study in 2011.

Download the full NHPC report in PDF format here: Residential Energy Efficiency Retrofit Programs in the U.S.

Source: Efficiency First

More info on the program is available through HUD: FHA PowerSaver

For more information on the NoVa Home Performance with ENERGY STAR program, check out their website.

Under the new law the max a homeowner could claim on equipment is:

• $300 for a qualified central air conditioner and heat pump (HVAC and hot water equipments)
• $150 for a qualified furnace or hot water boiler
• $50 for any advanced main air circulating fan.
• $300 for Qualified hot water heaters

The new law will also increase the qualifying standards for hot water boilers, including natural gas, propane, oil furnaces, and oil boilers to 95% AFUE. The qualifying standards for natural gas furnaces and propane furnace remain at 95% AFUE.

The qualifying standard for central air conditioners and heat pumps, which were modified by the Stimulus bill in 2009, are not changed.

The major difference is the new law reinstates the lifetime credit caps of 2005. This means any homeowner who has claimed more than $500 in 25C tax credits since January 1, 2005, is disqualified from any further credits.

Another major question is whether someone can still get the $1,500 tax credit who signs a contract for work before Dec 31,2010 even if the actual work isn’t done until 2011. The work must be completed by December 31, 2010 in order to qualify for the $1,500 cap. If the qualifying improvements are completed before January 1, 2011, then you may still claim the $1,500 cap.

To read the Tax Provision of 2009 ending Dec 31, 2010, click here to be redirected to the IRS page.

To read the Original Tax Provision of 2005, click here to be redirected to the IRS page.

“This information is provided to you as a courtesy by Recurve and should not be considered tax or accounting advice. You are urged to consult an accountant or tax attorney if you wish to have certainty about your tax claims.”

Included are provisions limiting window incentives to $200, oil and gas furnace and boiler incentives to $150-200, and water heater and wood heating system incentives to $300. As part of the legislation, Congress tightening the specifications for oil furnaces and boilers and gas boilers to 95% efficiency, up from the 90% efficiency in current credit.

“Together, these programs will grow the home retrofit industry and help middle-class families save money and energy,” says Vice President Biden

The program is designed to encourage homeowners to make energy-saving upgrades and to jump-start the industry for home energy retrofits, Biden said in a statement. It will also include financing for homeowners (up to $25,000) and software that will let energy contractors give consumers the home efficiency equivalent of miles per gallon for cars.

Sources:
CNET
USA Today

These rebates can be used on top of the latest incentives from PG&E (up to $3,500). And combined with federal rebates and the Cash for Appliances program, homeowners can get a total of up to $8,000 for making their home more energy-wise. Sounds like a win-win situation for everyone!

Contact Recurve today at 877.303.0979 to get started. Hurry though – these funds are extremely limited. Cash for Appliances is 60% gone and tax credits expire this year.

It initially appeared that the slender offshore drilling package was a “must-pass” bill with political momentum, but it became evident during the past week that Reid lacked the votes within his own caucus to force the issue as the Republicans held firm against it.

Central to the offshore drilling reform bill was a title to eliminate the $75 million liability cap on damages oil companies must pay in the case of spills and other disasters. Sens. Mary Landrieu (D-La.) and Mark Begich (D-Alaska), both close allies of the oil industry, made clear they opposed that provision.

The deeply partisan atmosphere in the Senate ensured that there would be no opportunity to amend the bill with a scaled-down compromise liability title. Reid’s staff had made clear that if the bill were to come to the floor, it would be subject to a only straight up or down vote.

Supporters of the HOME STAR legislation are now focusing their efforts on a renewed push to get the law enacted in the fall when Congress is back in session.

Read the full Politico report here: www.politico.com/news/stories/0810/40597.html.

The U.S. Chamber of Commerce, the world’s largest business federation representing the interests of more than three million businesses and organizations of every size, sector, and region, supports S. 3434, the “Home Star Energy Retrofit Act of 2010,” which would provide a solid framework for a worthwhile, incentive-based program that would create American jobs while saving energy.

The home retrofit industry is a uniquely American industry: the vast majority of windows, doors, and insulation for these retrofits are manufactured in the United States. Since 2006, this industry has been decimated, with more than 650,000 jobs lost. The incentives provided by S. 3434 would create good, living-wage jobs for American workers, while providing homeowners the ability to make a substantial dent in their overall energy costs.

The Chamber supports S. 3434 and hopes this important legislation is considered by the full Senate in the near term.

Visit www.efficiencyfirst.org/home-star to learn more about the proposed HOME STAR incentive program, and about how you can join the trade association Efficiency First and other national organizations in supporting this important legislation.

A free Webinar recording at www.utilityexchange.org/webinar/20100701 will help your shop get ready for HOME STAR’s performance-based GOLD STAR incentive with a road map to BPI accreditation.

PACE programs stalled by federal mortgage regulators
Property Assessed Clean Energy (PACE) financing programs across the country have been suspended following recent actions by Fannie Mae and Freddie Mac, the government-sponsored corporations that back most home mortgages in the United States. The problem is that the Federal Housing Finance Agency (FHFA), which oversees Fannie and Freddie, doesn’t like the idea of PACE liens taking precedence over mortgages in foreclosure proceedings—despite the fact that energy improvements typically increase the value of a home, and the potential financial impact on the mortgage industry is comparatively small.

PACE programs, which allow property owners to pay for a wide range of energy improvements with loans attached to their property tax assessments, have been lauded as an innovative, transformative financing model for energy efficiency and renewable energy projects. But in May, Fannie and Freddie started spreading the word among commercial lenders that properties with energy improvement liens that are senior to mortgage debt would not meet FHFA underwriting standards. The FHFA confirmed the new policy on July 6 when it issued guidelines that have effectively made it impossible for homeowners to get approval for mortgages on homes with pace liens attached. (A grandfather cause exempts PACE loans issued before July 6.)
That leaves homeowners and contractors caught in the crossfire as most PACE programs have stopped making loans, projects are being suspended, and $150 million in federal stimulus funding allocated to PACE financing is being diverted to other programs. However, at least one prominent PACE program—the Sonoma County Energy Independence Program (SCEIP) in Northern California—has announced that it will continue to issue energy improvement loans in defiance of federal mortgage regulators, “predicated on the SCEIP providing full and complete disclosure about program participation to any potential applicants and ensuring the public fully understands the consequences of participation.”

PACE advocates around the country are pushing for a judicial or legislative solution to the impasse. California Attorney General Jerry Brown has filed suit in United States District Court seeking reversal of the FHFA ruling, and on July 15, Rep. Mike Thompson and 29 other members of Congress introduced the PACE Assessment Protection Act of 2010, which would force Fannie and Freddie to adopt underwriting guidelines that support PACE lending. But for now at least, most homeowners will have to find other ways to finance energy improvement projects.

Unfortunately, the discussions between the Obama Administration and the FHFA have not been successful. DOE and the White House have informed us that the senior lien — regardless of how structured, accelerated, or insured — is not acceptable to the regulators. New guidance from Fannie and Freddie to this effect is due out soon. DOE has begun notifying ARRA grant recipients that they probably want to start moving their grant funds away from residential PACE.

A subsequent report in the New York Times confirmed that Cathy Zoi, the DOE’s Assistant Secretary for Energy Efficiency and Renewable Energy, had contacted DeVries to say that “the administration needed to begin contingency planning on what to do with stimulus funding for PACE.” The Times also quoted Ben Pearlman, a county commissioner in Boulder, Colorado, who received a similar call from Secretary Zoi saying that “in light of the circumstances we should look at other ways of financing energy efficiency with the stimulus money.”

Although Fannie, Freddie and the FHFA have yet to issue formal guidelines regarding PACE liens, local governments across the country are freezing their property-assessed lending programs pending government action that would clear the way for PACE lending to resume.

Meanwhile, Rep. Barney Frank, chairman of the House Financial Services Committee, and Rep. Henry Waxman, head of the House Energy and Commerce Committee, have sent a letter urging administration officials to “quickly identify, agree on and publish guidelines that would allow PACE financing programs to continue while ensuring that both taxpayer and private mortgage investments are protected.” And the Washington Post has cited an anonymous source within the Department of Energy saying that the DOE is “seeking protection for homeowners who have already taken on PACE financing.”

Minimal financial impact: Earlier on Friday, before these latest reports began to surface, the Times‘ Todd Woody posted a thought-provoking analysis suggesting that the potential liability related to PACE liens would be tiny:

Putting aside whether such liens are any different from the property tax assessments commonly used to finance municipal improvements, how big a potential liability would Fannie and Freddie face?

Not very big, according to an analysis by the California attorney general’s office.

In a June 22 letter to the Federal Housing Finance Agency, which oversees Fannie and Freddie, Ken Alex, a senior assistant attorney general, cited the example of a homeowner who obtains $15,000 in financing from a PACE program to pay for a solar array and energy efficiency upgrades.

With a 7 percent interest rate and a 20-year payback term, the annual assessment on the homeowner’s property tax bill would be about $1,500.

“At the time of foreclosure for failing to pay the mortgage, it is likely that at most, one PACE assessment of $1,500 would have achieved priority lien status,” Mr. Alex wrote.

“This exercise suggests that with a portfolio of Fannie/Freddie mortgages that have PACE liens, assuming a high foreclosure rate of 10 percent, PACE seniority would average $150 per home,” he added. “Using a more reasonable foreclosure rate of 5 percent, average PACE seniority per home would be a mere $75.”

More on this topic:

• Energy Lien Is Little Threat to Loan Giants (New York Times, 7/2/2010)
• Obama Admin Unable to Resolve Shutdown of PACE Clean-Energy Program (Grist, 7/3/2010)
• Loan Giants Opt to Block Energy Programs (New York Times, 7/3/2010)
• U.S. Lawmakers Urge Guidance for Clean Energy Loans (Reuters, 7/3/2010)
• Green Initiative’s Future Murky as Regulators Weigh Risks to Homeowners (Washington Post, 7/4/2010)
• Fannie and Freddie to clean-energy program: Drop dead (Grist, 7/6/2010)

How Does the ME2 Program Work?

• You must get a home energy audit to qualify for the rebates
• Since the program is sponsored by the city of Berkeley, you must own a single-family home or duplex in the city and meet certain income guidelines. You must be up-to-date on your taxes and liens.
• Recurve will help you apply for the ME2 rebate program which is available based on a lottery system based on applications received during a 2 week period (July 6- 20). People who will get the rebates will be selected at random from the pool of applicants after July 20th at midnight
• Special financing is available through Recurve – if you want to finance the net (after rebate) cost of your home improvements

When is the ME2 Program Available?
Sign up for a home energy audit now. The ME2 Program is taking applications for the lottery July 6 – 20, 2010. It’s likely the money will run out during these 2 weeks, but if it doesn’t, they’ll accept applications on a first come, first serve basis after the 20th. The PG&E Pilot Program will have money available for a longer timeframe.

Full details here: http://www.recurve.com/what-we-do/financing/berkeley1/

Home energy waste vs. Gulf oil spill

If only the Senate had some sort of legislative strategy that could put this information to use … oh, wait, it does! Home Star legislation will spur the retrofit of 3.3 million homes, enough to save the energy floating in the Gulf 44 times over, at roughly 1/40 the cost of mopping it up. As we speak, that legislation is languishing in the Senate. If its energy efficiency provisions are improved, the coming Senate energy bill could save even more energy and money. Perhaps senators could spend less time rending garments and encouraging Obama to Act Angry and more time passing the energy solutions sitting in front of them.

——

Here’s Energy Savvy’s explanation of the graphic:

• The energy contained in the biggest oil spill in U.S. history is equal to the energy that just 75,000 homes waste in a single year.
• The estimated cost to clean up the oil spill ($40 B) is many times greater than the cost to retrofit 75,000 houses ($1 B) and save the energy equivalent of the gulf oil spill every year.
• 75,000 houses = mid-sized U.S. city or large suburb of a major city, like Chattanooga, Tenn. or Providence, R.I.
• The oil spill, since it began in April 2010, has leaked between 25 – 50 million gallons of oil into the Gulf of Mexico. We’re using a conservative estimate of around 30 million gallons for our calculations.
• A typical house wastes 30 percent more energy than an efficient one does. On average, that means that 51 MMBtu’s are being wasted by a typical home every year.
• A typical home energy retrofit costs around $10,000 per house — before any utility or governments energy rebates are applied. A home energy retrofit doesn’t just save energy for a single year — it prevents waste year after year on an ongoing basis once it’s done.

Source: Energy Savvy and Grist

As a reminder, a PACE bond is a bond where the proceeds are lent to commercial and residential property owners to finance energy retrofits (efficiency measures and small renewable energy systems) and who then repay their loans over 20 years via an annual assessment on their property tax bill. PACE bonds can be issued by municipal financing districts or finance companies and the proceeds can be typically used to retrofit both commercial and residential properties.

The advantages of PACE programs include significant job creation, reduction in greenhouse gas emissions, lower energy bills and substantially reduced upfront cost for energy improvements, increase in property value, improved return on investment, and many more.

Check out the article in the New York Times here.

Read the full article in the New York Times here.

Governor Arnold Schwarzenegger issued a statement after President Barack Obama outlined more details of a new Home Star program that encourages American families to invest in energy saving home improvements which will also help create jobs. Said Governor Schwarzenegger:

“I am excited about the Home Star program that the President detailed today. Offering incentives to Americans who make their homes more energy efficient will help create jobs and save homeowners money while also helping to reduce greenhouse gas emissions. This is a promising idea, and Democrats and Republicans should work together to enact it into law.”

Obama has previously said that shifting the U.S. toward cleaner, renewable sources of energy and making homes — particularly older houses — more energy-efficient will help accomplish three goals: reducing America’s dependence on foreign energy sources, creating much-needed jobs and saving consumers money on their utility bills.

Under the first level of energy rebates, Silver Star, consumers would be eligible for rebates between $1,000-$1,500 for a variety of home upgrades, including adding insulation, sealing leaky ducts and replacing water heaters, HVAC units, windows, roofing and doors. There would be a maximum rebate of $3,000 per home.

Under the second level, Gold Star, consumers who get home energy audits and then make changes designed to reduce energy costs by at least 20 percent would be eligible for a $3,000 rebate. Additional rebates would be available for savings above 20 percent.

The administration expects household demand for energy upgrades to be boosted once the program is underway, similar to how Cash for Clunkers boosted demand for fuel-efficient vehicles.

Read the full article from Associated Press here.

Read the full article here.

Following yesterday’s test vote on a $15 billion job-creation package proposed by Senate Majority Leader Harry Reid, the first in a series of bills aimed at lowering the nation’s unemployment rate is poised to pass the Senate later this week. Congressional leaders have indicated that three to five more job bills are in the works, including legislation authorizing the proposed HOME STAR retrofit incentive program.

The current bill creates or extends tax breaks designed to encourage hiring of unemployed workers and retention of existing employees, and allocates funds for various labor-intensive infrastructure projects. Five Republican Senators voted in favor of the legislation, including newly elected Massachusetts Sen. Scott Brown. The 62-30 vote blocked a GOP filibuster and virtually assures passage of the bill when a final vote is taken.

Efficiency First continues to be actively engaged in the legislative process, and is working closely with members of the House and Senate to assure inclusion of the HOME STAR language in subsequent legislation.

Late last year the California Public Utilities Commission (CPUC) quietly handed down a set of policy decisions that will have a profound impact on energy management here in California.

The provisions set forth in the document – which was developed in response to regulatory obligations imposed on all states by the federal Energy Information and Security Act (EISA) of 2007 – will guarantee access to electricity rate and usage information for most of the state’s utility customers, and for third parties that have been authorized to receive the information. With the widespread deployment of smart grid and smart meter technology, this data will give utility customers and energy efficiency businesses the tools they need to monitor and control household electricity, leading to lower energy bills for millions of California homeowners.

“Data access is the key to maximizing the effectiveness of smart grid technology,” said CPUC Commissioner Dian Grueneich, who has been a tireless advocate for making energy efficiency a cornerstone of state energy policy. “These rulings will play an important role as we strive to transform the way Californians think about and use energy.”

The CPUC decision is part of an ongoing process that was launched to align state energy policy with EISA requirements, and with federal requirements pertaining to American Recovery and Reinvestment Act funding for electricity grid modernization.

The CPUC set a goal for the state’s three largest power companies (Southern California Edison Company, Pacific Gas & Electric and San Diego Gas & Electric Company) to make usage information available to customers and authorized third parties by the end of this year. Ultimately, the three utilities will be required to install smart meters for all customers and make usage and price data available on a near-real-time basis. Four smaller utility companies were excluded from the ruling on the basis that doing so would “both increase the costs and diminish the benefits of the EISA requirements.”

The decision states that next phase of the proceeding will be to “consider rules to provide customers and third parties with access to usage and price data consistent with Energy Information and Security Act of 2007 standards, the general public interest, and state privacy rules.”

In 2010, 200 local governments nationwide are expected to have administered programs based on the PACE model. Good ideas are worth spreading!

A pair of articles in yesterday’s edition of the San Jose Mercury News shed light on the growing national interest in energy efficiency and on the proposed HOME STAR retrofit incentive program. “Solar and wind power may get the headlines and attention,” the newspaper reported, “but green-tech experts say 2010 will be dominated by energy efficiency, the mundane but critical process of cutting the amount of gas and electricity that homes and offices use.”

Of particular interest to business leaders in the construction and related manufacturing sectors is the fact that investors are increasingly betting on the profitability of reducing energy waste:

Venture capital investment in energy efficiency hit a record in 2009: at least 115 deals worth nearly $1 billion, according to a preliminary tally by the Cleantech Group and Deloitte. That’s up 39 percent from 2008. Meanwhile, solar, which had 84 deals worth about $1.2 billion, was down 64 percent from 2008, and there’s increasing talk about solar being “overfunded.”

“In 2009, there was a pullback and realization by investors that because of the capital intensity of solar, there may be safer places to put their money,” said Scott Smith, U.S. cleantech leader for Deloitte.”

Mercury News staff writer Dana Hull also emphasized the wider economic and environmental benefits of energy efficiency: “It’s increasingly seen as an effective way to create desperately needed jobs, save struggling consumers money, wean America from its dependence on foreign oil and reduce carbon emissions – all at the same time.”

A second article provides an overview of the HOME STAR incentive program:

Silicon Valley venture capitalist John Doerr, who serves on President Barack Obama’s board of outside economic advisers, is a leading champion for Home Star, which he describes as “Cash for Caulkers.” The idea has widespread support from big-box retailers, labor unions, environmental groups and the construction and contracting industries, which have been devastated by the collapse of the housing market. Although national unemployment remains at about 10 percent, almost a quarter of the nation’s construction workers are unemployed, according to the U.S. Bureau of Labor Statistics.

We are in an urgent moment where we desperately need jobs,” said Bracken Hendricks, a senior fellow at the Center for American Progress and an architect of the Home Star legislation. “You have business and environmental interests aligned around making this happen, and happen now. I have never seen a coalition this broad and this committed.”

Here are links to the full articles:

“Energy Efficiency to Shine in 2010”
www.mercurynews.com/breaking-news/ci_14241691

“Government working on ‘Home Star’ Plan for Energy-Efficiency Rebates”
www.mercurynews.com/breaking-news/ci_14261182?nclick_check=1

In this article, Cisco discusses a shift in financing models for energy efficient improvements and renewable energy projects by funding them through loans attached to property tax. Dozens of states and municipalities, including several in the Bay Area such as Berkeley, Sonoma, and San Francisco, have already hopped on the bandwagon – thus demonstrating support for a public-private hybrid financing model that will achieve several goals at once: cutting energy use and carbon emissions, putting Americans back to work, and stimulating economic growth.

• The increase in net zero energy building. Check out the Palo Alto historic retrofit we did here: Palo Alto Net Zero
• Energy efficiency retrofits finally get financing support. CA has set aside over $3 billion, most of which will come from utility rebates.
• Property assessed clean energy loans (PACE) gain popularity and are implemented in several states and municipalities.

See Greentech Media’s Top Ten in Green Building in 2009.

Mayor Newsom, Recurve founder Matt Golden, Assessor-Recorder Phil Ting, and others announce SF Sustainable Financing Program

San Francisco Mayor Gavin Newsom announced on Monday that San Francisco is introducing legislation to help finance new residential and commercial energy efficiency and renewable energy projects. San Francisco Sustainable Financing Program (SF²) is modeled after similar programs adopted by cities such as Berkeley and Palm Desert, in which the loan for improvements is attached to the property, rather than the individual, and will be paid back through property taxes over the life of the financing.

San Francisco Sustainable Financing (SF2) Highlights:

• Establishes a citywide “Mello-Roos” Special Tax District.
• Residential and commercial buildings of all sizes will be eligible.
• Some of the eligible upgrades include: insulation, replacing windows, upgrading heating systems; water efficiency upgrades—such as installing low flow toilets, potable water offsets, irrigation measures, storm water management improvements; financing will also be available for installation of renewable energy generation on buildings, such as solar arrays, solar water heaters and wind turbines
• Program phases in a mandate of a whole home energy efficiency audit and the installation of energy efficiency upgrades before renewable energy generation improvements.
• Private capital to fund the retrofits through Renewable Funding, LLC.
• Program participants can deduct the interest component of their solar financing tax on their tax returns.
  Similar programs exist currently in Berkeley and Sonoma, and others are under development around the state, but San Francisco’s is the most aggressive and includes comprehensive water and energy efficiency improvements as well as renewable generation like solar.

According to Inhabitat, the genius of San Francisco Sustainable Financing is that it will leverage private market lending and available state and federal grant dollars to help home and business owners overcome the costs of green improvements without financial risk to San Francisco taxpayers. Up to $150 million has been set aside for this new program. This is different than cities with similar “repayment through property tax” solar and environmental improvement programs, where public or City investment dollars are used for financing instead.