RISMEDIA, March 6, 2009-(MCT)-In Santos Espinosa’s small beige house near Arden Fair mall last week, a crew installed fluorescent lightbulbs, swapped out an old water heater and filled drafty gaps beneath doors. For thousands of Sacramento-area households, this sort of work stands to be the biggest direct benefit of the federal economic stimulus package. The bill pumps at least $20 billion into energy efficiency, by far the largest such investment in U.S. history.
Many details of how the stimulus funds will be spent have yet to be finalized, but the bill outlines a bonanza for homes, businesses and the public sector.
Grants targeting low-income households like Espinosa’s will jump at least fivefold. All homeowners will get a tax credit (up to $1,500) that’s worth up to 30% of a project’s cost – three times as much as is currently offered. Cities and counties will get millions to cut waste in their buildings and fund efficiency initiatives. Sacramento-area universities are hoping for grants to expand efficiency research. Local venture capitalists say the funding should help new green-tech companies get off the ground.
Economists say an investment in efficiency delivers a double benefit. Spending on installation boosts manufacturers, hardware suppliers and construction workers. Lower utility bills give households and businesses more money to pour back into the local economy. And that local spending, said David Roland-Holst, a professor of economics at the University of California, Berkeley, delivers far more job-creating punch than money spent on energy, much of which flows out of the state to buy fossil fuels.
“It really is a potent stimulus,” he said.
Espinosa, a 51-year-old drug and alcohol counselor who lives with his daughter, is hoping the efficiency gains will cut his $250 monthly utility bill by $100 or more. “I’m pretty sure it’s going to be a lot,” he said. “When I shut the heater off, (the house) just sucks the cold air in.” He said he plans to spend the savings on car repairs and food.
The crew at the house works for Community Resource Project Inc., a Sacramento nonprofit that administers federal low-income weatherization funds in Sacramento, Sutter and Yuba counties.
Deputy Director Joan Graham said the group hired 20 installation workers in January to keep up with a federal funding increase passed last fall and expects to add more once it’s clear how much the stimulus package will deliver.
In Espinosa’s kitchen, Juan Mendoza worked his way along the wall, installing gaskets behind the cover plates on the electrical outlets to stop air leaks. Mendoza, hired last summer, said the work is a step up from his previous position installing office cubicles. “You learn so much,” he said.
Graham said she received more than a thousand applications in her last round of hiring. Many applicants were experienced construction workers who in better times made more than the $13 to $18 per hour, plus benefits, that Community Resource Project pays new hires.
“There were a lot of very skilled people out there,” she said. “Usually we don’t get that.”
The federal low-income weatherization program gets $5 billion under the stimulus bill. California will see about $216 million, according to one estimate, and the Sacramento area will likely get more than $10 million. That’s enough to cover a few thousand homes, likely only a fraction of those eligible, Graham said. The Department of Energy hasn’t released income qualification standards.
Local heating and air-conditioning contractors stand to get new business from the increased homeowner’s tax credit for efficiency upgrades.
“Everybody’s starved for cash right now, so this is some pretty exciting stuff,” said Rick Wylie, president of Sacramento’s Beutler Corp.
New incentives, though, will have to reverse consumers’ recent cutbacks in spending. The Sacramento Municipal Utility District lopped $10 million, or 22%, off the 2009 budget for its efficiency-incentive program after demand fell in the second half of 2008. Among other things, the program provides rebates on energy-efficient appliances and air-conditioners.
© 2009, Sacramento Bee
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