Green Me Now

Updated appliances, better windows and insulation are what President Barack Obama has in mind in what has become known as the Cash for Caulkers program. He wants to expand on the $8 billon in energy-efficiency initiatives that are already part of the $787 billion Recovery Act. The funds so far are largely in the form of tax breaks, which to this point appear relatively ineffective at getting homeowners to jump onboard by installing insulation, sealing leaks and modernizing heating and air conditioning systems.

As reported earlier, the four- and five-figure up-front costs of such projects are the likely stumbling block (see “Tax Credits Proving Less than Effective”).

The lack of low-interest long-term loans contributes to the problem, though programs tying renewable energy system purchases to property taxes appear to be gaining some traction. Former President Bill Clinton has been stumping for means to help homeowners with the upfront costs (see “Clinton Cites Financing as Retrofit Hurdle”).

In an early December appeal to Congress, and again in a mid-month visit to a DC-area Home Depot, Obama proposed that the U.S. “provide incentives for consumers who retrofit their homes to become more energy-efficient, which we know creates jobs, saves money for families, and reduces the pollution that threatens our environment,” he said in prepared remarks.

With many of the Recovery Act initiatives already oversubscribed, Obama is hoping to expand the federally funded programs that are likely to leverage private investment. Providing rebates for consumers who make energy efficiency retrofits, the reasoning goes, will harness the power of the private sector to help drive consumers to make cost-saving investments in their homes, according to an announcement.

Cash for Caulkers is the name penned by the lawmakers and business executives who suggested the program. Obama did not use the phrase, according to a Bloomberg report, but it quickly went mainstream anyway.

The plan to help homeowners pay for energy improvements would clearly provide a boost to insulation makers and big box retailers Home Depot and Lowe’s, who carry the insulation, sealants, polyurethane foams, tapes and adhesives that are core in any weatherization project.

Obama’s appeal to Congress provided no specifics on the amount of the rebates or the program’s cost, which would require Congressional approval.

Bloomberg reports that the idea was proposed initially by Vermont Representative Peter Welch in a plan for $20 billion in energy-efficiency rebates over two years. Obama’s plan is expected to be somewhat less ambitious.