Sheila McNulty Obama makes a good move on energy

The Obama administration has provided more details about how it plans to create jobs by encouraging American families to invest in energy saving home improvements. The $6bn programme, which requires Congress’ approval, is known as Home Star and nicknamed Cash for Caulkers. It is aimed at reducing the 25 per cent unemployment rate in the construction sector, and taking advantage of under-utilised manufacturing capacity, by having Americans make their homes more energy efficient.

The plan would be to make consumers eligible for rebates at the point of sale for energy-saving investments. Vendors, ranging from small building material dealers to utilities with energy efficiency programmes, would market the rebates, would provide them directly to consumers and then be reimbursed by the federal government.

For things such as insulation, duct sealing, water heater, and other such straightforward upgrades, consumers would be eligible for 50 per cent rebates up to $1,000 to $1,500. Those seeking more comprehensive upgrades would be eligible for a $3,000 rebate for a whole home energy audit and subsequent retrofit geared toward achieving a 20 per cent energy savings in their homes. In the words of White House:

This program will result in the creation of tens of thousands of jobs while achieving substantial reductions in energy use – the equivalent of the entire output of three coal-fired power palnts each year. Consumers in the program are anticipated to save between $200 – $500 per year in energy costs, while improving the comfort and value of their homes.

Here is how Lane Burt, manager of Building Energy Policy at the Natural Resources Defense Council, responded:

Some estimates show that homeowners could save up to $1,200 a year on energy costs while improving the comfort and value of their homes. Even the most basic upgrade puts money in our pockets, puts Americans back to work and puts energy waste on the run. It’s a triple play on a more efficient future. And it pays for itself by helping our economy to recover. I hope Congress will continue to work hard to make this a reality.

These are the sorts of programs the Obama Administration should have rolled out immediately upon taking office. President Obama has a limited time  to achieve the goals he promised the American people. The big reforms, ranging from cap and trade and health care reform, are so monumental that they are struggling to get through Congress. It is by taking incremental steps toward cleaning up the country that President Obama can make a difference.