HOME STAR Incentives to Energize the Home Performance Market

May 03, 2010
May/June 2010
A version of this article appears in the May/June 2010 issue of Home Energy Magazine.
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For years, those of us who work in the energy remodeling field have been promoting the personal and environmental benefits of home performance retrofits. Now industry leaders and policymakers are focusing on yet another compelling reason for Americans to invest in energy efficiency improvements—they create jobs. With one in four construction workers currently facing long-term unemployment, our nation desperately needs to cultivate sustainable employment opportunities that will breathe life into the troubled construction sector and help our economy get back on track. Large-scale retrofitting of American homes can be a big part of the solution.

Late last year, the President’s Economic Recovery Advisory Board—a panel of nongovernmental experts who advise the White House on practical solutions to the economic crisis—unanimously endorsed a plan to stimulate consumer demand for energy retrofits as a cost-effective way to put hundreds of thousands of unemployed Americans back to work in construction-related trades. This plan, known as HOME STAR, would provide direct incentives to homeowners who invest in efficiency improvements.

As we write this article, Congress is considering legislation that would authorize funding for the program and make HOME STAR incentives a reality for millions of American homeowners. Final details about the structure of the program won’t be known until the legislation is signed into law, but here is an overview of the plan as it is currently taking shape on Capitol Hill:

HOME STAR is designed to stimulate consumer demand for energy retrofits by offering direct consumer rebates for qualifying home improvements. The short-term goal is to encourage rapid growth of the home performance retrofit market, and to boost sales of domestically produced manufactured goods used in home performance retrofitting. These rebates will be phased out as the industry gains strength and government incentives are no longer needed.

The proposal also allocates funding for consumer lending programs to help homeowners invest in energy efficiency improvements. Financing options will vary from state to state.

HOME STAR gives homeowners a choice of two types of incentive.  The SILVER STAR path provides rebates for specific energy-saving measures, including air sealing, insulation, duct sealing or replacement, replacement of windows and doors, and installation of high-efficiency appliances and HVAC equipment. SILVER STAR rebates range from $125 to $1,500 per measure, with a benefit not exceeding $3,000 or 50% of total project costs (whichever is less).

The GOLD STAR path is a performance-based incentive that rewards predicted energy savings rather than individual measures. This option gives homeowners the freedom to choose the measures that are most suited to their particular home and budget. First, a BPI-accredited company or RESNET-certified rater conducts a comprehensive audit of the home and designs a customized retrofit plan for the homeowner; then the work is conducted by a BPI-accredited contractor. GOLD STAR incentive amounts are determined as a function of whole-home energy savings achieved via the proposed improvements. Consumers receive $3,000 for a 20% simulation-predicted reduction in energy use, plus an additional $1,000 for each additional 5% reduction up to a cap of $8,000 or 50% of total project costs (whichever is less).

At the request of the homeowner, HOME STAR rebates can be assigned to qualified contractors or retailers. This provision allows incentive amounts to be deducted from overall project costs at the time of sale, with rebates paid directly to the contractor or supplier following completion of the work and a simple paperwork review.

To prevent fraud and ensure quality, HOME STAR requires appropriate licensing for all participating contractors, plus BPI accreditation for GOLD STAR work. A percentage of all jobs will be inspected to verify proper installation.

HOME STAR was developed by a coalition of business leaders and contractors with boots-on-the-ground experience in the industry, including members of the home performance trade association Efficiency First. We continue to advise the White House and legislative leaders as the proposal works its way through Congress.

Jared Asch is the national director for Efficiency First, a nonprofit trade association that unites home performance contractors, residential energy consultants, building product manufacturers, and other key members of America’s growing green-collar workforce.

Matt Golden
is the cofounder and president of Recurve (formerly Sustainable Spaces). Founded in 2004, the company acts as a full-service resource for homeowners to improve the comfort, health, and efficiency of their home.

For more information:

To learn how you can get involved in the HOME STAR program, visit www.efficiencyfirst.org/home-star.

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