HomeStar Primer – Good for the economy, good for homeowners?

HomeStar (aka Cash for Caulkers) is a proposed measure introduced in the Senate to “create good living-wage jobs in construction and related industries by providing strong short-term incentives for home energy efficiency improvements.”  It was also designed to “reward homeowners for investing in insulation and weatherization, high-efficiency heating and air conditioning equipment, replacement windows and other cost-effective home improvements that can permanently reduce household energy bills.“ (’s Talking Points)

The HomeStar Plan

Senate Bill 3177 aka the ‘Home Star Energy Retrofit Act of 2010’

This bill as proposed above gives homeowners a choice of two types of incentives.  The Silver Star Home Energy Retrofit Program and the Gold Star Home Energy Retrofit Program. One nice item in the bill is the Contractor requirements for both sections which include: (1) that they are licensed as required by the State (2) insurance coverage of at least $1,000,000 for general liability (3) warranties to homeowners that completed work will be free of significant defects; be installed in accordance with the specifications of the manufacturer; and perform properly for a period of at least 1 year after the date of completion of the work.

The Silver Star program provides rebates for air sealing; attic, wall or crawl space insulation; duct sealing or replacement; and replacement of existing windows, doors, water heaters, household appliances or heating and air conditioning equipment. Rebate amounts are up to $1,500 per qualified installed measure, capped at 50 percent of project costs or $3,000 (whichever is less).

The Gold Star program is a performance-based incentive program. It is based on predicted energy savings as determined by a thorough energy audit performed before the work begins. Based on this Energy Audit, homeowners can receive $3,000 for modeled savings of 20%, plus $1,000 for each additional 5% of modeled energy savings, with incentives not to exceed 50% of total project costs

Senator Markey & his 4 Star rating

Senator Markey is one of the Senator’s that introduced Senate Bill 3177. After he introduced it, he sent out a press release: where he stated that he feels that HomeStar Will Be Summer Blockbuster for Consumers, Jobs & gave it a rating of Four Stars.

  • Creating New Jobs – Over 168,000 jobs will be saved or created in the construction, manufacturing, and retail sectors.
  • Saving Consumers Money -Energy efficient homes will save hardworking families more than a billion dollars in 2011 alone – and $9.5 billion over the next decade.
  • Saving Energy – Efficiency upgrades cut energy waste and foreign oil imports. Home Star will save the same amount of energy as 615,000 cars, and means we’ll need 4 less power plants.
  • Products Made in the U.S.A. – 90% of the retrofit products for Home Star – windows, doors, and insulation – are manufactured in the USA.
The Verdict

Based just on the items listed above, it should come as no surprise that there are over 1200 organizations and manufacturers actively supporting this legislation. One of the biggest organizations “getting out the vote” is the HomeStar Coalition. Many of these organizations are also hoping that this just might help get some consumers over the hump. Many consumers are gun shy, due to the past history of the Energy Efficiency market. They are hoping to get consumers to realize that retrofitting is the most cost-effective proven ways to reduce household energy costs. Not only can a retrofit help you with your long-term energy bill savings, but the comfort that one can derive from it.

Speaking not only as the owner of SLS Construction, but as a regular citizen, I really do think that we are getting into some serious trouble with all our spending and borrowing that has been occurring lately. We have now survived the Tech, Oil, and the Housing bubbles in the last 15 years to find ourselves in a Government Spending Bubble. If we are not careful when this one pops, we could face some very serious issues that cannot be overcome as easily as the market based ones.  

With that being said, I really do think that this can be a very good piece of legislation, which would probably meet the goals of reducing energy usage and probably create some much-needed jobs. The cost vs. value argument I think would come down on the side of the bill passing (even without the typical inflation of benefits that people love to use).  So why then isn’t SLS Construction listed as a supporter? I happen to see a few problems with the way the bill is written, that I feel need to be addressed before I can really say that “yes, this is a great bill.”

In a future article – some of the issues we will cover:
  • Sam Bagwell

    I also have the biased opinion that the HomeStar legislation would be decent from a value perspective. The fact that it reduces energy and creates jobs makes it a powerful weapon as we are coming out of the recession. Plus, energy efficiency retrofits need a jump start. At present, they have very little traction. This could be the incentive that causes a substantial number of homeowners to invest in energy efficiency for their home. The retrofit of existing housing stock would reduce substantially our dependence on foreign oil.