Creating Jobs by Investing in Energy Efficiency

07/05/2010 05:12 am ET | Updated May 25, 2011

For the past decade, my home state of Vermont has led the way in making its homes and businesses more energy efficient. On Thursday, when the U.S. House of Representatives votes on my Home Star Energy Retrofit Act (H.R. 5019), the rest of the country will have a chance to catch up.

Home Star is a common sense idea that would create jobs and provide a boost to local economies, while helping families afford their energy bills. By encouraging homeowners to invest in energy efficiency retrofits, Home Star would create 170,000 manufacturing and construction jobs that could not be outsourced to China. It would also help more than 3 million Americans invest in energy-saving technology, saving families close to $10 billion on their energy bills over 10 years.

Home Star provides two ways for Americans to invest in their homes. The first is a point-of-sale rebate for up to 50 percent of the cost of certain energy efficiency improvements up to $3,000 per home -- including insulation, HVAC units, duct sealing and water heaters. The second is a more comprehensive retrofit that rewards homeowners for the total amount of energy they save. For example, a 20 percent energy savings demonstrated by a home energy audit would result in a $3,000 rebate.

The program's job creation benefits would be threefold.

First, the bill would put back to work construction trade workers -- including contractors, carpenters and HVAC technicians -- all reeling from the industry's 25 percent unemployment rate.

Second, energy efficiency rebates would trigger a wave of consumer spending at local hardware stores and lumber dealers throughout the country, creating jobs at struggling retail businesses hit hard by the drop in construction-related spending.

Third, it would jump-start manufacturing by increasing demand for American-made insulation, roofing materials, storm windows and heating systems.

The potential for Home Star to create jobs is proven and real. In Vermont, our statewide energy efficiency utility, Efficiency Vermont, created more than 430 jobs in 2007 and 2008, generating more than $40 million in income. It has also laid the groundwork for an energy efficiency industry that will continue to create jobs and save homeowners money in the coming years.

But the benefits of Home Star go far beyond job creation. For an economic recovery program to be effective, it must not only create a short-term economic boost but also generate lasting value. Home Star would accomplish that by breaking down the key barrier between homeowners and money-saving retrofits: upfront costs.

Leveraging private capital, the rebates would enable the renovation of 3 million homes for a fraction of the federal investment. The savings for homeowners -- between $200 and $500 a year in reduced energy bills -- would be invaluable to families throughout the country.

Investing in efficiency is also a critical step toward addressing our nation's growing energy crisis. Homes and buildings, many of which are old and drafty, eat up 40 percent of the energy America uses. Such inefficiencies perpetuate our reliance on foreign oil, imperiling our national security and increasing our contribution to climate change.

Vermont has proven that efficiency works. In its first seven years, Efficiency Vermont cut our energy use by 7 percent, reducing costs for homes and businesses by $31 million annually. Expanded nationally, Home Star would save as much energy as taking three coal-fired power plants offline or hundreds of thousands of cars off the road.

In every city and town, builders and contractors need work, homeowners need to save money, and leaking buildings need to be plugged. By empowering families in every state in the country to follow Vermont's lead, we will succeed in creating quality jobs throughout America, helping homeowners save money and reducing our contribution to climate change.

Congressman Peter Welch is the at-large Congressman from Vermont. A member of the House Energy and Commerce Committee, he is the author and lead sponsor of the Home Star Energy Retrofit Act (H.R. 5019).