“Insulation is Sexy!”

Really?   That’s what President Obama said when promoting new tax credits for energy efficiency. He was talking about the so-called “Cash for Caulkers” program (more officially known as Homestar). It’s a program that’s been proposed by both venture capitalist John Doerr and former President Bill Clinton that would offer homeowners money for weatherization as part of another stimulus package. The program would give tax breaks to pay for upgrades and energy audits.

It’s a great idea — it creates business, therefore creates jobs and makes homes more efficient. People like to talk about building more energy efficient homes, but the reality is that even building every one of the 500,000 or so homes being built more efficiently will make only a tiny dent in energy usage compared to the potential of upgrading the millions of existing homes. Supporters of the program, which is apparently being considered at the White House, say it would lead to retrofits of 5.9 million homes and create 500,000 jobs.

The Home Star program — or “Cash for Caulkers” as some have dubbed it — could provide a big boost to home energy efficiency through billions in tax credits and other incentives over two years. President Obama came out in favor of the program in December as part of the administration’s plan to drive job creation, but the final approval has to come from Congress. The exact size of the program is uncertain, but Efficiency First, a trade association started in early 2009 for home energy-efficiency contractors that helped craft Home Star, put the price tag at about $23 billion.

What would the money go for? Here’s how Efficiency First breaks it down:

•$6 billion in funding for homeowner incentives for those who do at least two significant weatherization projects from a list of 10 eligible project types such as air sealing or insulation. Completing two projects would result in up to $2,000 in subsidies and completing four could earn $3,500, capped at 50 percent of project cost.

•$12 billion for homeowners who undertake a weatherization project that reduces energy consumption by at least 20 percent. A 20 percent reduction would earn a $4,000 subsidy and each additional 5 percent would result in another $1,500 subsidy, with funding capped at 50 percent of project cost.

•$2 billion for program administration, including audits of some projects to confirm they’re meeting the energy improvements

•$3 billion in incentives to encourage retailers to support the program to build awareness and educate consumers

Efficiency First says the program would result in 5.9 million residential energy retrofits and create more than 500,000 jobs new jobs in construction and related industries. “Unemployment in the construction industry is double the rest of the economy,” says Matt Golden, founding president of Efficiency First. “Considering the underreporting in this industry, it’s probably really up in the 20s. These really are smart jobs, because they’re long-term.”

The National Association of Home Builders estimates that 11,000 jobs; $527 million in wages and salaries; and $300 million in business income are generated by every $1 billion in new remodeling and home improvement activity. “That’s a huge impact just in the short run, and in the long run, the energy savings for participating homeowners can be quite significant,” says NAHB Chairman Joe Robson.

(Adapted from an article in Professional Remodeler Magazine)