January 26th, 2009

Update on Green Aspects of President Obama’s Stimulus Package

by Jason Pelletier, Low Impact Living

Details are finally emerging on how President Obama’s stimulus program intersects with energy efficiency and green building. The House of Representatives recently published a draft of the plan (shown here), and there’s significant money allocated to green initiatives. Depending on how you slice it, at least $50 billion will go to green-related programs. Some of the highlights include the following:

• $11.0 billion to fund the development of a “smart” electrical grid;
• $7.9 billion in energy-related grants to states;
• $6.2 billion in subsidies to low-income households for energy audits and weatherization;
• $2.5 billion to demonstrate the feasibility of carbon capture and storage technologies;
• $2.0 billion to fund research and development into advanced batteries, biomass fuels ($0.8B+) and geothermal technologies ($0.4B+);
• $1.0 billion to guarantee loans to develop advanced batteries;
• $0.5 billion to fund water reclamation and reuse projects.

The good news is that, all in all, these projects should go a long way towards jumpstarting a low-carbon economy.

The bad news? At first glance, there’s not a huge amount here that will directly benefit individual consumers and homeowners looking to green their homes. The $6.2 billion in weatherization funds will help, but that only applies to a subset of the population:

• It applies to households that are at or below 200% of the poverty level. For a family of four, that works out to be somewhere in the neighborhood of $44,000 per year of income.
• The funds don’t flow directly to the family, but instead from the Federal Government down to the states and then directly to weatherization agencies (who can be either local government or nonprofit organizations). These organizations provide services to about 60,000 homes a year, so this program will have to grow by 20-30x in order to meet President Obama’s goal of weatherizing 2,000,000 homes. It’s hard to see that happening quickly unless private sector service providers are brought into the program.

States have some flexibility to customize their programs, so we hope that the range of families and service providers involved is larger than this. And, there’s always hope that the states will broaden the reach of the stimulus package depending on how they spend their slice of the $7.9 billion allocated to state grant programs. Those details, though, have yet to be worked out.

We’ll keep you posted, of course, as things develop!

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