Testimony of Steven Nadel, Executive Director, for the the U.S. Senate Committee on Energy and Natural Resources Hearing on Appliance Standards

Testimony

Authors

Steven Nadel

Description:

Home Star is a program to create jobs by improving the energy efficiency of homes, reducing homeowner energy bills and laying the groundwork for the longer-term Retrofit for Energy-Efficiency Program (REEP) contained in the American Clean Energy and Security Act (ACES). Home Star is essentially a program for the middle-class—those who are not eligible for free weatherization under the low-income Weatherization Assistance Program (WAP). The Home Star program was developed and is being championed by a large coalition, of which ACEEE is a member. ACEEE supports Home Star because it:

  • creates jobs
  • saves energy
  • saves consumers money
  • makes consumers more comfortable
  • helps stretch available domestic energy resources
  • reduces emissions of greenhouse gases
  • lays the ground-work for a longer-term effort, as contained in REEP

Home Star will create jobs because residential retrofits are labor-intensive. On a national level, a dollar invested in energy efficiency will create about 17 jobs per million dollars invested, counting both direct jobs (e.g., construction and manufacturing) and indirect jobs (e.g., wholesale and retail). These are significantly more jobs than the approximately 7 jobs created per million dollars spent on energy purchases. So for each $1 million we save on energy bills and invest in energy efficiency, we generate about ten net jobs. Furthermore, when energy bills are reduced, the money saved is spent elsewhere in the economy, generating some additional jobs.

On March 9, 2010, ACEEE released an analysis on the jobs impacts of Home Star using an input-output model of the U.S. economy. We estimate that Home Star will generate 126,000 jobs in 2010 and 36,000 in 2011. In addition, ongoing energy savings in homes that are retrofitted in 2010 and 2011 will result in about 2,000 jobs each year from 2012 to 2019 (the last year in our analysis). ACEEE's estimate of 162,000 jobs in 2010 and 2011 is very similar to an earlier analysis prepared for the Home Star Coalition that estimated 168,000 jobs in 2010 and 2011. These macroeconomic analyses involve a combination of "science" and "art," and for these two estimates to be so close is reassuring.

As part of our analysis of the Home Star program we also looked at what the likely energy savings and emissions reductions will be. Overall, we estimate that the more than 3 million participating households will save about $1.1 billion in their energy bills annually at current energy prices. Savings will increase if energy prices go up. The emissions reductions total more than 4 million metric tons of carbon dioxide annually, equivalent to taking 767,000 cars off the road.

Our detailed submission also discusses the process and criteria that were used to select the specific energy-saving measures that are included in Home Star.