President Barack Obama today announced the details of "Homestar," Cash for Clunkers-like rebate program designed to entice Americans to make their houses more energy efficient. The plan generated favorable but cautious support from building material dealers' national trade group, which has been working hard to make certain the program benefits independent dealers.
Under the proposal (see White House fact sheet), homeowners could be eligible for up to $3,000 in rebates for purchases of efficient product upgrades or whole-house audits/retrofits. Obama wants the program, dubbed "Cash for Caulkers" and first mentioned in his January State of the Union address, included in a jobs package being drafted by Congress.
The administration hopes the incentives will boost demand for building products such as insulation, energy-efficient windows, and roofing in the same way car sales skyrocketed last year when consumers were offered rebates for trading in their gas-guzzling autos for more fuel-friendly models. The White House says the program would create "tens of thousands" of jobs, cut energy bills for families by $200 to $500 per year, and reduce the nation's dependence on oil.
Administration officials are still working with Congress on details, but they have confirmed the program would cost about $6 billion and that up to 3 million households would participate, according to the Associated Press. Some details, including how long the program will run, have not been worked out with Congress.
"It is going to be politically difficult to do some of this," Obama said outside Savannah (Ga.) Technical College, the site of his announcement. "I am confident we can do it."
Michael O'Brien, president and CEO of the National Lumber and Building Material Dealers Association (NLBMDA), said the group supports Homestar in concept but says many issues remain to be worked out.
"We have been working closely with the White House (a meeting today, actually), the Department of Energy and Capitol Hill to help shape a program that can work for both small and large dealers so that they are not put at a competitive disadvantage with the big boxes," O'Brien told ProSales in an e-mail. "There are still many unanswered questions as to the mechanics of the rebate system so that it does not replicate the problems of Cash for Clunkers."
Under the plan, consumers would collect point-of-sale rebates for energy-efficient purchases. A broad array of vendors--from small independent building material dealers and energy efficiency professionals to large national home improvement chains--would market the rebates, provide them directly to consumers, and then be reimbursed by the federal government.
Under the first level of rebates, called Silver Star, consumers would be eligible for up to $1,500 for a variety of home upgrades, including adding insulation, sealing leaky ducts, and replacing inefficient water heaters, HVAC units, windows, roofing, and doors. There would be a maximum rebate of $3,000 per home.
Under the more comprehensive second level, Gold Star, consumers would be eligible for a $3,000 rebate for a whole-house energy audit and subsequent retrofit tailored to achieve a 20% energy savings. Additional rebates would be available for savings above 20%.
Other building products manufacturers and nonprofit environmental groups heralded the new plan.
"This has the potential to be a real shot in the arm for the home building industry," said National Association of Home Builders Chairman Bob Jones, a builder and developer in Bloomfield Hills, Mich. "It will help put America back to work and it will help families save on monthly energy bills."
Jennifer Goodman is Senior Editor Online for EcoHome, a sister publication to ProSales.