Home Star Passes in House; Senate Vote Looming

Posted by Steve Kleber on May 13, 2010

Like its venerable (and controversial) Energy Star predecessor, the Home Star bill would pave the way for homeowners and contractors to reap the benefits from energy-efficient and “green” projects.

Michigan Congressman Sander Levin announced last week that the House of Representatives approved legislation to provide rebates and loans for home energy efficiency improvements.  The so-called “Home Star Energy Retrofit Act” (H.R. 5019) passed by a bipartisan vote of 246 to 161.  The legislation must now be considered by the U.S. Senate.

The bill, also known as “Cash for Caulkers,” builds on the home energy efficiency tax credit included in the stimulus bill. According to comments made by President Obama, the Home Star program offers two different consumer incentives:

  • Silver Star – Provides in-store rebates for specific energy-saving investments, including insulation, duct sealing, furnaces, windows and doors, air sealing and water heaters. Homeowners receive up to $1,500 per measure, with a rebate not exceeding $3,000 or 50 percent of the total project cost.
  • Gold Star – This performance path rewards homeowners who conduct a comprehensive energy audit and implement a variety of measures to reduce energy use. Consumers receive $3,000 for a demonstrated savings of 20 percent, plus an additional $1,000 for each additional 5 percent energy savings with a maximum rebate of $8,000.

“The building material industry has experienced significant job loss during the housing and economic crisis of the past few years. Retailers of building materials alone have lost over 140,000 jobs since 2006,” says National Lumber and Building Material Dealers Association (NLBMDA) president Michael O’Brien in a prepared remark to the press. “Incentives for improving home energy efficiency, such as those that would be created by the Home Star program, are powerful tools to drive consumer purchases that in turn drive the restoration of jobs across the building supply chain,” he says.

The NLBMDA also expressed disappointment at the rejection of the Boswell Amendment to the Home Star legislation, which would have delayed application of the EPA Lead Renovation, Repair and Painting Rule (LRRP) to Home Star-funded retrofit projects for one year. The amendment was sponsored by Rep. Leonard Boswell (D-Iowa). “NLBMDA has continued to raise concerns about the impact of the LRRP on the success of Home Star,” said O’Brien. “Without enough certified renovators, trainers and accurate test kits, there simply may not be enough qualified installers to perform Home Star-funded retrofit work.”

The House, according to official releases sent to the industry press, must still appropriate the $6 billion authorized for the Home Star program. The U.S. Senate has not yet scheduled consideration of the legislation.

The House has yet to draft a provision that explains how all of this will be actually paid for. In our opinion, that leaves a gaping hole large enough to drive a Mack Truck through, but any efforts made by Congress are certainly looked forward-to.

So what’s included in the bill? According to Peter Grier from the Christian Science Monitor, more products and services are included in the bill than builders, contactors and home building industry executives might think. Among the highlights are:

  • Attic and wall insulation are eligible – though they have to meet certain standards outlined in the bill. For instance, crawl space insulation has to cover at least 500 square feet if Uncle Sam is going to help cover its cost.
  • Window replacements are eligible, but at least eight windows, or 75 percent of a home’s exterior windows and skylights, have to be included in the replacement effort, according to the bill’s fine print.
  • Door replacements are included as well – and you only have to swap out one.
  • New furnaces and heat pumps are eligible. But they have to meet efficiency criteria (which isn’t all that hard, considering most geothermal heat pumps and cooling systems are inherently energy efficient to being with).
  • Under the House bill, according to Grier, consumers would have two ways of tapping into “Cash for Caulkers” money.
  • Under the “Silver Star” program, they would get rebates totaling up to $3,000 for energy efficiency house retrofits. Cash would be limited to 50 percent of total project cost, however. Individual appliances would be eligible for rebates of $250.
  • Under the “Gold Star” program, homeowners would be eligible for a $3,000 rebate if they conduct a whole-house energy analysis and install stuff that increases their overall energy efficiency by 20 percent. Plus, they’d be eligible for an additional $1,000 rebate for each further five-percent efficiency improvement, up to a grand total maximum top line of $8,000 in government cash.
  • Consumers would access this money via discounts or rebates given by contractors or stores at point of sale. These vendors would then turn around and apply to the government for the actual federal funds.

Note: Grier also says don’t go rushing out to Home Depot this weekend! The bill has only passed the House. The Senate must pass similar legislation, and President Obama would have to sign it, before it becomes law.

This entry was posted by Steve Kleber on Thursday, May 13th, 2010 at 1:38 pm and is filed under Housing Market. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.