A member of Congress asked the Energize America team to transform its concepts into material ready for Congressional action. The newly minted "Efficient American Homes of 2007 Act" (EAHA) seeks the right policy to help households make the "easy" choice.
Last week I started discussion about the economics of fossil fuel efficiency in American households. Turns out, since the oil shock of the '70s, the market and our government have relied more on "energy saving" than "energy efficient" measures to meet GHG policy goals.
Now we're under the gun --in more ways than one-- and need your help selecting key messages from the diary and your experiences. We need to Re-Energize Energize America!
Following is a more formal version of EAHA. Give it a good read, please. Let us know what you believe are the Top 5 points that can move our recommenations out of committee and onto the floor.
Objectives
(i) To deliver financial incentives to householders and property owners that reward residential energy efficiency and (ii) to acelerate the rate of investment in capital improvement to public and private property.
Market and Legislative Landscape
Energy efficiency is one of two fundamental strategies to reduce Greenhouse Gas (GHG) emissions and fossil fuel dependencies. The other is fuel type replacement. But their costs and perceived value to householders pose challenges to achieving and sustaining complementary ends.
Energy saving trends reveal lagging consumer confidence in high-value, efficiency projects. In 2001, electricity accounted for 65% of energy consumption, of which 51% was attributed to non-durable appliances such as home entertainment equipment, swimming pool pumps, and lighting.[1] Since, EnergyStar labelling has helped consumers select energy saving appliances, reducing their share of utility expenses to 34%.[2] In 2005, estimated share of heating (space and water), ventillation, and cooling (HVAC) remained unchanged at 58% of the bill.
Financial intelligence and resources skew household energy consumption. The largest share of household income spent on all energy falls disproportionaly on poor and lower-income families. And the largest share of investment in energy efficient home improvement --systemic investment-- falls primarily on the top two income deciles. These investors, like non-governmental and HUD researchers, are aware that retrofit or replacement immediately adds 20% of market value to their equity positions.[3]
Indeed, according to the 2005 American Housing Survey, there are 108M occupied homes. Some 20% of renters, 6.8M households, live in subsidized housing. And 79% of all the nation's housing stock is aged 20 years and older.[4] Because durables' lifetimes can exceed 20 years, this share implies equally significant, residual energy inefficiencies in owner-occupied as well as rental properties.
Guides to energy saving are widely available yet poorly supported in practice. The Energy Policy Act of 2005 (EPAct) enabled criteria and financial incentives for energy saving projects. The scope and benefit of these measures, however, are limiting. DOE has missed 34 deadlines for setting energy efficiency standards for 20 product categories.[5] Applicable tax credits fall far short of the 30% cost cap specified [6] and may be subject to AMT red-lining.
Completed DOE rules, appliances:
Refrigerators, Small furnaces, Washing machines
Pending (2011 deadline, agreed in 15-state 2005 law suit)
Warm air furnaces, boilers, Water heaters (storage), Water heaters (demand), Water tanks (unfired)
State agencies and local utility companies have instituted grant ("rebate") programs to promote energy efficiency appliances and fuel type replacement. Popular programming is concentrated in competitive electricity markets ("deregulated states"). These programs are unable to match demand due to underfunding. Only a massive increase in the amount of funds available to householders and state-regulated energy assistance programs will soften the blow of rising fuel and GHG emissions costs.
Description
EAHA provisions will emend US tax code (Title II), mandate energy efficiency standards, and provide budget for regulatory enforcement.
- Enforcing Energy Saving Standards.
a. Consumable and durable appliance standards.
b. Public-private Partnership in Energy Saving Education.
- Enforcing Energy Efficiency in Home Improvement
a. Residential HVAC and Envelope standards
b. State- and federal-owned Housing Investment
- Extending Affordable Financial Terms.
a. Energy Efficiency Mortgages and Lines of Credit
b. EA Neighborhood Act Maintenance of Effort
- Expanding Tax Credit Allowances by Type and Value The current max. total is $500, for all projects combined. Allowances during 2007 through 2008 period are given below.
Federal rated energy saving products (max credit):
gas, oil, propane furnaces, boilers ($150); CAC, including air- and ground-source heat pump ($300); HVAC fana ($50); Water heaters, heat pump water heaters ($300)
Manufacturer-rated efficiency systems.
Insulation; Replacement windows ($200); External doors; Shell and duct repair; Pigmented metal roofs; solar or fuel cell ($2000)
Benefits
EAHA measures will directly invest tax revenue in residential capital improvement
- Enable households to afford a greater variety of energy efficiency projects
- Stimulate demand for efficient and renewable technologies in more regions
- Drive industry development in system manufacture, construction, and installation
- Increase awareness of and application for energy efficiency benefits
Estimated Costs Over The Enactment Period
Over 10 years, EAHA programs will cost $00B.
- Foregone tax revenue, $00B
- Program expenses, $000M
- Program revenue, $000M
EAHA programs will generate federal revenue from fees and benefits associated with standards certification.
- Net EAHA Expense, $00B
- GHG savings, 00T kWh, 00T tonnes CO2
Key Messages
HELP! I can't choose. We need a critter reality check!
: : Notes
1 RECS 2001; 2 consumer pie; 3 The Appraisal Journal (pdf, 1999)link, related news, HUD Valuation Analysis (Directive No. 4150); 4 AHS 2005 pdf; 5 GAO pdfe; dkos diary Inefficient Governance; 6 period extended through 2008 by H.R. 6111; proposed through 2012 by H.R. 5206, S.2677 and 2016 by H.R. 550, S.590, eere.gov news, seia.org news, TIAP guide, Cost vs Value Report 2004 , 2005 HTML | pdf