Home Energy Makeover
Rich Manning is crawling through an attic, flashlight in hand. "See this?" he says, pointing a beam of light at a gap in the insulation. "They're losing a ton of money with all the heat coming out of here." Manning is conducting an energy audit, measuring how and where heat escapes from the house and making recommendations for more insulation, caulking, and weather stripping or for high-efficiency heating and cooling systems, all of which reduce energy consumption, bring down utility bills, and curb greenhouse gas emissions.
Bill Broglie, the home's owner, and his golden retriever, Meatball, listen as Manning explains his findings. "You'll need a foot more insulation up there," he says. The good news: it may cost Broglie nothing.
The energy audit is part of the Long Island Green Homes program, an innovative year-old project in Babylon, New York, that offers low-interest financing for home energy retrofits. The town covers the cost of the work, and the homeowner simply agrees to pay it back over time in monthly installments. The repayments are structured to be less than the projected savings on energy costs, so the retrofits more than pay for themselves. Another bonus: if you move, the remaining payments fall to the next owner, who also inherits the lower cost and greater comfort of a more efficient, less drafty home.
"We know people aren't going to come up with thousands of dollars for insulation," says Steve Bellone, the town supervisor. "And if they're thinking about selling, they're not going to make improvements that benefit the next owner."
In the United States, homes account for 20 percent of carbon dioxide emissions, mostly through electricity use and heating systems that run on natural gas and oil. Efficiency improvements, which can be completed in a matter of hours, can lower energy consumption as much as 40 percent. By 2020, implementing such retrofits nationwide could cut emissions by up to 160 million metric tons annually -- the equivalent of taking 30 million cars off the road -- while saving homeowners $21 billion in utility bills each year.
The Babylon program and a handful of similar projects around the country -- in places like Boulder, Colorado, and Berkeley, California -- are known by the acronym PACE, which stands for Property Assessed Clean Energy. The PACE model topples the traditional barriers that make homeowners reluctant to undertake improvements -- namely, the high up-front costs-and offers an enticing new way to spur energy savings and curb greenhouse gas emissions from homes.
"It's been tough to convince building owners to reduce their carbon footprint," says Greg Hale, a financial policy specialist at the Natural Resources Defense Council. "The beauty of PACE is that it ties the cost of retrofits to the property rather than the homeowner."
In less than two years, the PACE model has gone from being the dream of a few forward-thinking mayors to a major policy initiative set to expand nationally. The program's appeal is simple: besides offering savings to home-owners, it creates green jobs for contractors and benefits the planet at no net cost. Manning, who has seen his auditing business increase tenfold in the past year, calls the approach a "win-win-win-win situation."
The PACE model is attracting powerful backers. Last October Vice President Joe Biden made PACE a key component of his Recovery Through Retrofit plan, citing the unrealized potential of home energy retrofits to create green jobs, especially among contractors idled by the real estate slump. So far, 14 states have changed their tax laws to allow for PACE programs, paving the way for some of the nation's major population centers to get in on the game. Already, Los Angeles, Milwaukee, New Orleans, New York City, and San Francisco have begun to lay plans for PACE-style programs.
The programs will vary from place to place, in part because of differences in tax and municipal finance laws. Some municipalities will issue bonds, some will secure financing from investment banks or other private lending partners, and, as in the case of Babylon, some will tap into special government funds. PACE financing is appealing to lenders because of its low-risk structure: in the event of a foreclosure, proceeds from the sale of the property would first be used to make good on delinquent PACE payments before satisfying mortgage debts.
Of course, drumming up consumer interest is a vital part of the program. In Babylon, town employees fanned out in public parks, at pools, and on beaches, offering residents reusable water bottles, bags, and beverage cozies in exchange for filling out questionnaires and learning more about home energy use.
Ria Muriello learned about the program in the local paper. An ebullient grandmother of five, Muriello went online to fill out a detailed questionnaire about her home -- from the number of chandeliers she has (four) to the age of her washing machine (10 years) -- and provided a two-year history of utility use. She spent $250 for an energy audit and was approved for $6,298 worth of weatherization, to be paid off over seven years with help from utility company rebates and federal tax credits. Contractors blew 12 inches of fiberglass into areas around her porch and stuffed four inches of dense-pack cellulose into the garage walls, along with other upgrades. The work, projected to save her $925 a year, was finished in a day.
Babylon has retrofitted nearly 300 homes in the past year, cutting annual energy bills and greenhouse gas emissions by about $1,020 and four tons of carbon dioxide per house.
Muriello, who was recently laid off, is happy with the results. "I'm not feeling drafts and my bills have gone down," she says.
Read OnEarth's continuing coverage of PACE.