In his much-anticipated jobs speech last week, Obama introduced a program meant to encourage energy efficiency retrofits for residential housing; it has since become known as “cash for caulkers.” On Tuesday, Obama will host a discussion at a Washington-area Home Depot focusing on the economic benefits of retrofits and soliciting ideas for how such a program should work.
The attention to retrofits is welcome—making buildings more energy efficient reduces climate pollution, creates jobs, and saves consumers money all at once.—but there’s reason to believe that “cash for caulkers” is limited in ways that will sharply curtail its environmental and job-creating potential.
The details of the program haven’t been revealed, but public statements from the administration have focused almost entirely on cash rebates, which would pay back homeowners up to half the cost of various retrofit investments. There’s a way to get far more bang for federal bucks, though, and it has to do with financing. Sen. Jeff Merkley (D-Ore.), the Senate’s leading champion on retrofits, sent Obama a letter (PDF) on Friday, describing how the retrofit program could be improved:
I strongly believe that to achieve these [energy saving and job creating] goals, the program must include financing assistance for residential and commercial building owners who cannot afford the upfront cost of a home renovation but who could pay for it out of the savings they will see on their energy bill. Financing assistance can allow federal dollars to be leveraged substantially farther than a rebate program. For example, appropriating $2 billion for loan guarantees could allow $20-$40 billion in financing.