Home Performance Opportunity in the Market

Question: In brief, what is the stimulus bill everyone is talking about and what is its purpose?

What is typically referred to as the stimulus bill is the American Recovery and Reinvestment Act (ARRA), which was created to stimulate the economy in a number of areas by providing $787 billion in economic investment nationally.

The key goals of the ARRA are:

1. To increase green jobs  2. Reduce U.S. oil dependency by promoting energy efficiency and renewables  3. Reduce green house gas emissions.

Question: How are the stimulus dollars for promoting energy efficiency and renewables allocated?

Most of these stimulus dollars flow through the department of energy (DOE) as well as state energy commissions.  Many cities and counties got allocations from the DOE based on population size.  In addition, there are competitive grants that cities and counties can apply for.  The total pot of money in California received from the DOE is $3.2 billion.

Question: With all the acronyms floating around regarding stimulus money it's hard to keep track.  Could you enlighten us?

Certainly, a few that you may have heard include SEP, CEC, EECBG, NSP and WAP.

State Energy Program (SEP funds).  In California, the CEC (California Energy Commission) got $275.6 million.  Some of this money was allocated to cities and counties, and some will be offered through competitive bidding.  For the competitive bidding, the government agencies will be applying within three program areas: 1. municipal financing programs (this is what Renewable Funding assists cities in implementing) 2. Comprehensive residential building program 3.  Municipal and commerical retrofits.

Energy Efficiency and Conservation Block Grants (EECBG).   California local governments got $302 million and the CEC got $49.6 million to distribute among smaller local governments.  This money is specifically allocated for reducing energy consumption (not renewables) and may be used in a number of ways, including: marketing, rebates, incentives, loan funds, etc.

Neighborhood Stabilization Program (NSP) - $2.08 billion nationwide for the purchase and redevelopment of foreclosed and abandoned properties.  Cities will be allocated this money and will also bid competitively for this funding.

Weatherization Assistance Programs (WAP).  California will receive $185 million, which will be passed on to the existing state weatherization programs such as LIHEAP which provide free weatherization assistance to low-income households.

Question: bottom line, what does all the stimulus money mean for home performance contractors?

Essentially, there are three areas to consider.

1. Cash Incentives: There will be more rebates and incentives for home owners and commercial properties.  This will include money to pay for audits and additional incentives for remediation work based on energy savings potential.

2. Loan Programs: There will be financing available through cities and counties to property owners to pay for remediation projects. This will help cover the upfront costs.

3. Job Training: There will be money for job training, which will subsidize entry level salaries.  Most likely this funding will be for workforce development "Green Jobs" helping underserved populations become involved in the green economy.

Question: How do you position your company to take advantage of these upcoming funding opportunities?

First, make sure you have all your certifications and credentials in order.  In California, most likely HERS II will set the standard and nationally ResNet and BPI.  Then, you should be talking with your local government about their strategic plans for using these funds.  Some cities have already created their plan, but many cities are still developing their plan and looking for input from community stakeholders.  Develop a plan for your company that will integrate with these funding opportunities and then get your company on the approved vendor list of the city.  Finally, stay involved in the local government stakeholder meetings, trainings, etc.  so that  you understand how homeowners can tap into these funds.

Question: What about all the people coming through training now who are just starting new home performance companies?  How should they position themselves?

How cities and counties use their funds will be public information.  New contractors can find out which governments are applying their funds to residential building retrofits or financing programs (versus commercial and municipal projects).   These programs will offer opportunities for property owners to pay for the retrofits and will make marketing and sales in these cities easier and more cost-effective.