I’ve been thinking more than usual this Labor Day weekend about putting Americans to work while solving our energy crises. If our goals are to reduce unemployment, reduce our dependence on fossil fuels, and improve all the buildings that are bleeding energy into the night sky, we need a better way to sell and finance home energy weatherization contracts.
The problem: how we sell weatherization work
Need-driven solar subsidies and PACE-type loan programs require the initiative to come from the client. But most people are not very motivated to save energy unless the improvements are free or “pay for themselves.” They aren’t likely to pick up the phone and call for an energy audit, let alone schedule the small improvements that would actually have decent payback.
If, instead of a need-based subsidy, future tax credit, or any type of home-equity loan, we could sell $600 to $6,000 audit / weatherization packages as contract add-ons to the electrical connection, we could cut the paperwork and dramatically simplify the sales process. Instead of advertising to motivate customers to act, weatherization companies could target neighborhoods with door hangers and a deal where all you have to do is get a quick “energy nosebleed” audit, sign a contract agreeing to have the cost of the audit and repairs added to your monthly utility bill proportional to the anticipated cost savings, and give the utility permission to stop service for non-payment.
I can’t believe what I’m seeing
I’m talking about the little “I can’t believe what I’m seeing here” energy nosebleeds I see in middle-class homes and starter mansions: the disconnected, torn, or crushed AC supply ducts in the attic; the powered attic ventilators that are sucking conditioned air out of houses; the unsealed and uninsulated kitchen soffits; the inadequate attic ventilation; the tub drain cut-outs, HVAC chases, and skylight chases that are draining energy from homes. These problems don’t cost much to fix, and the payback for the repair work is decent compared with solar panels and new windows.
The contract add-on would be similar to the way some cable TV and internet is sold, as an add-on to the phone bill. There would be no impact on home equity, no need for an additional credit check, as that is in place from the original utility connection. The preliminary audit would identify the “nosebleeds” that would have payback equivalent to the cost of the service during the time-frame of the agreement. Owner-occupied homes would be the logical target, but the pay-by-utility bill approach could work for rentals and light commercial properties as well.
There would have to be language in the contract to cover payment or transfer at sale of the property as well as to cover situations where service cancellation due to non-payment could damage property or occupant health.
The sales would be handled by weatherization contractors; all the utility would do is pass on the payment. Licensed energy auditors would find the nosebleeds as part of the sales team for the weatherization companies.
Quality control would be managed through state energy office, with spot checks similar to termite-treatment companies. The same energy offices could manage the financial end, as middleman between investment firms selling green investment bonds and the weatherization companies signing on to sell and install large amounts of weatherization. Community colleges could train auditors, installers, and managers.
This would allow weatherization companies to go door-to-door promoting a low-cost home energy tune-up with zero cash outlay, no impact on home equity, and minimal inconvenience to the occupants in the execution of the work — 100% financed by energy savings. This way, rather than waiting for the consumer to call and set up an appointment, a company can target whole neighborhoods and sign up a large percentage of the homes in a subdivision and reach some economies of scale and efficiencies of neighborhood implementation.
Subsidized weatherization skews the value of for-profit weatherization
I’m opposed to subsidies for solar and weatherization, because I believe they skew the value of the work, creating the impression that it “isn’t worth it” unless subsidized. People will buy as much solar as the government will subsidize, and stop there. They like getting something for nothing, and if they can get up to a certain part of solar at half price, they wonder why they should pay full price for additional capacity.
Even fully subsidized “free” weatherization for low-income families is problematical, because middle-class and wealthy people live and work in buildings that can save energy with modest weatherization improvements; since some people get this work for free, it sets the expectation that the work shouldn’t be expensive.
I’m equally opposed to subsidies for the gas, nuclear, and coal industries. When gas goes over $3.50 a gallon, people sell gas-guzzlers and buy mopeds and hybrids, or they plan their driving so they can drive less. Once gas prices stabilize, we see new Mustangs and monster trucks on the highways.
Rather than spending stimulus money on rebuilding roads, let’s just change the way we sell weatherization. We should invest in research and education to retrain our own people to reduce our need for energy through American ingenuity. We can put people to work at the same time that we reduce the deficit.
Author’s note: These opinions are mine alone and don’t necessarily reflect those of others who contribute to or frequent this site.