The Home Efficiency Act

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Act XVII of Energize America

Contents

Objectives

1) To provide incentives for homeowners and landlords to make their dwellings more energy efficient, and 2) to create broad public support for energy efficiency by delivering tangible short-term benefits.

Description

The largest monthly household operating expenses are typically heating and cooling, hot water heating, and lighting. Therefore, the quickest and most effective way to reduce energy consumption, and to reduce consumers’ monthly energy costs, is to ensure that homes and apartments are as energy-efficient as possible. In addition, incandescent bulbs waste up to 90% of their energy as heat, making them highly inefficient sources of light, especially compared to modern technologies such as high-intensity light emitting diodes (LEDs) and compact fluorescent lights (CFLs).

The Home Efficiency Act includes two provisions – tax credits for residential energy efficiency improvements, and the distribution of two compact fluorescent lamps via coupons from local utilities to each American household. Homeowners and renters will be encouraged to replace their two most frequently used bulbs and compare the difference in electricity usage the following month. The Home Efficiency Act provides each household with clear and compelling proof of the value of energy efficiency, as well as a highly visible marketing platform that will increase program awareness and citizen participation.

The Home Efficiency Act will also provide a tax credit up to 50% of the cost of energy-related upgrades, based on geographically-specific standards. Examples of qualified repairs and upgrades include: a) Insulation (50% tax credit), b) weather-stripping (50% tax credit) and c) energy-efficient windows (25% tax credit).

In addition, the Home Efficiency Act will formalize the procedures allowing energy projects that help lower the energy consumption of Americans under the Community-Based Energy Investment Act to share the benefits of such savings fairly between the homeowner and the program investor. Homes purchased with FHA or FmHA loans will be required to meet increasing energy efficiency standards. Low cost loans will be provided through these agencies to help finance necessary upgrades, ensuring that the lower economic end of the home-buying spectrum will not be disadvantaged through homes that are cheaper to buy but costly to heat and cool. Mortgage lenders will be required to include likely utility costs in the calculation of housing affordability, and to share this information with prospective home buyers.

Benefits

By 2020, the Home Efficiency Act can reduce energy consumption in the residential sector by 20%. Furthermore, this act will ensure that the monthly costs for heating, cooling and lighting residential dwellings are minimized.

Investment

The Home Efficiency Act will cost $10 billion through 2020.

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