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American Recovery Act turns growth green in Columbia

Thursday, July 2, 2009 | 12:01 a.m. CDT
Dan Riepe sets up his blower door which measures how the air flows around doors. Homeowner Kathleen Maier said that she wanted to check for efficiency because of possible lower energy costs.

COLUMBIA — Brad McConnell was well aware of the nascent movement for energy-efficient housing when he started a contracting company last October that specializes in weatherizing homes. What he didn't foresee was the enormity of federal stimulus funding aimed at creating green-collar jobs to support the push for energy efficiency.

"It's incredibly good timing for me," McConnell, founder of Mid-Missouri Home Energy Services, said. "Nobody knew there was going to be $5 billion available," he said, referring to the allocation for the Weatherization Assistance Program through the American Recovery and Reinvestment Act.

Federal stimulus funding for energy efficiency

  •       $3.2 billion for the Energy Efficiency and Conservation Block Grants Program
  •     $4.5 billion for smart-grid projects
  •     $4.5 billion for the construction and implementation of energy efficiency in federal buildings
  •     $400 million for the Advanced Research Projects-Energy Program
  •     $200 million in grants for retrofits to affordable housing
  •     $500 million for the creation of green jobs

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The theory behind the Recovery Act's green jobs strategy is that the best route to a clean energy environment goes through consumers' wallets.

For instance, if tax incentives drive up demand for wind energy products, that not only creates jobs for manufacturers of wind energy technology but drives advancements in the field and turns a formerly blue-collar job (truck driver) into a green-collar job (truck driver transporting wind turbines).

McConnell's job — and the new jobs that his business will create — is an example of the ripple effect the funding has had in Columbia.

The volume of business generated from the stimulus plan for local companies that contribute to greater energy efficiency will depend on how much of the federal funding ends up in the budgets of local agencies and how many people take advantage of federal tax breaks.

"We still don't really know how it's all going to shake down," McConnell said.

In May, Central Missouri Community Action (CMCA) asked for a $3.64 million share of $128 million in state funding for the Weatherization Assistance Program. The request awaiting approval is for weatherization of low-income housing. The state funding will be disbursed during a two-year period, said Kerry Cordray, public information coordinator for the Missouri Department of Natural Resources.

CMCA Director of Economic Development Dianna Moore estimated that CMCA will experience a 150 percent increase in jobs and a 129 percent increase in homes weatherized should the $3.64 million request be approved. The $3.64 million would be a 455 percent increase from funding in the last two years.

"We weatherized 125 homes over the eight-county area last year," Moore said, "and we plan on weatherizing 625 over this two-year period."

CMCA is one of 18 agencies that provide programs to fight poverty in Missouri. It serves Boone, Audrain, Callaway, Cole, Cooper, Howard, Moniteau and Osage counties. The organization plans to create between 10 and 12 new positions in weatherization this year, while distributing additional work to area contractors, like McConnell, to handle the overflow.

"They don't want to take on too much too fast," McConnell said, "because paying attention to detail is the most important thing. (CMCA is) the most prepared agency in the state, but no one is prepared for the increase in jobs this funding could create."

McConnell and his partner at Mid-Missouri Home Energy Services, Michael Priest, anticipate hiring as many as nine new employees this year, depending on the amount of work CMCA allocates his company.

"For summer labor, we'd just be looking for students with experience swinging a hammer," McConnell said.

Weatherization enhances home energy performance by protecting the interior of a building from outside conditions. It involves sealing cracks and gaps around doors, windows, air ducts or lighting fixtures; repairing or replacing inefficient furnaces, boilers, water heaters or air conditioners; installing storm doors and windows; installing dampers to prevent air from entering a building through an exhaust fan or clothes dryer; installing insulation in floors, walls and ceilings; and various other methods of energy-efficiency improvement.

The Weatherization Assistance Program aims to reduce utility costs for low-income households (families of four with an income of $32,000 a year or less). Low-income households spend an average of 17 percent of their annual income on energy because of poor insulation, as opposed to 4 percent for higher-income households, according to a study by the Oak Ridge National Laboratory.

Although the energy efficiency needs of every home differ, weatherization is largely regarded as a process that "pays for itself" — that is, the long-term utilities savings eventually offset the costs of performing the home improvements.

Jobs in weatherization include auditors to determine what improvements are necessary, crews that carry out the improvements and oversight officials to ensure proper implementation of funding.

The Missouri Department of Natural Resources requested $10 million in the state budget over the next three years for weatherization training programs, public education, oversight and program administration. 

You don't need to qualify for low-income home weatherization to feel the effects of energy-efficient funding in Missouri, however. 

The Recovery Act allows for a 30 percent tax credit of up to $1,500 for existing homes on the following items:   

  •     Windows, doors or skylights with a U-factor (a measure of heat transfer and insulation efficiency) of .3 or less
  •     Energy Star qualified metal and asphalt roofing
  •     Gas, oil or propane water heaters with a thermal efficiency of at least 90 percent
  •     Biomass stoves with a thermal efficiency of at least 75 percent
  •     Insulation that meets International Energy Conservation Code standards
  •     Any heating, ventilating or air conditioning systems that meet energy-efficiency standards

A 30 percent rebate without a $1,500 ceiling is available for homeowners on the following:

  •    Energy Star qualified Geothermal heat pumps
  •    Solar water heaters that derive at least half of their energy from the sun
  •    Photovoltaic energy systems that meet fire and electrical codes
  •    Small wind turbines with a nameplate capacity less than 100 kilowatts

A full list of energy efficiency tax credits is available at energystar.gov/index.cfm?c=products.pr_tax_credits#c1.

Jay Hicks, owner of Window World, a window installation company in Columbia, is already seeing benefits from consumers taking advantage of tax credits. 

"I don't think it's sunk in with everybody yet," Hicks said, "But there are more people looking into replacing windows that might not have if not for the tax credit."

The Recovery Act's "green" provisions hope to take advantage of that consumer incentive in order to infuse economic recovery with environmental efficiency.

Home weatherization and retrofitting, for example, have the potential to create employment for roofers, insulators, inspectors, trainers and even college students looking for a summer job. 

Federal tax credits and rebates to consumers who decide to improve their home's energy efficiency on their own could also have a dramatic effect on the green jobs movement in the state.

"But right now, all this stuff is just about ready to unfold," McConnell added. "It's complex — right now it's about connecting all the dots. It's not just the weatherization program, it's not just the private sector, the rental sector, the city, state or the agencies; it's about all of them needing to work together."

 


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Comments

Greg Collins July 2, 2009 | 9:13 a.m.

"When I was asked earlier about the issue of coal…under my plan of a cap and trade system, electricity rates would necessarily skyrocket…"

Hope and change at work.

(Report Comment)
Mark Foecking July 2, 2009 | 10:40 a.m.

I don't know where Obama got the part about "skyrocket". Electricity rates, even in MO where we get most of our electricity from coal, might only go up a cent or two/kwh under this bill. It could even save money in the long run because it might delay, or obviate, the need to build more (expensive) power plants.

DK

(Report Comment)
Greg Collins July 2, 2009 | 11:36 a.m.

Cap and Trade is nothing more than a massive tax, it won't make a bit of difference in global climate issues, and it will kill jobs.

Costs rise a "cent or two"? ROTFL. Obama understands the "why" behind rates sky rocketing. Waxman-Markey will raise electricity rates 90% after adjusting for inflation, gas prices 74%, natural gas prices 55%, and an average family's annual energy bill by at least $1,500.

The new version that passed the House will have real GDP losses increase an additional $2 trillion, from $7.4 trillion to $9.6 trillion

(Report Comment)

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