Stimulus Money Created Jobs, Saved Energy

Hang around long enough and eventually you see and hear things come, go, and come back again. Take energy, for instance. Thirty-ninth president Jimmy Carter put a solar-powered heating system on the White House. Ronald Reagan ordered it taken down. Fast forward to 2009 and Congress passes the American Recovery and Reinvestment Act (ARRA). That legislation gave a window industry in free-fall exactly the lift it needed. (Shipments dropped from 70.5 million units in 2005 to 38.9 million in 2009, according to market research company Ducker Worldwide. Window shipments rose to 43 million in 2010.)

And as the stimulus moved into the second year of its two-year life, another bill — Home Star — appeared likely to pass. That would have injected $6 billion into the energy-retrofit market. But after passing the House last May, Home Star died a quiet death in the Senate.

Public interest in energy issues goes up and down. At the moment it remains up. The stimulus actually did what it was intended to do: create jobs by promoting products that save homeowners energy and money. Many Americans already have energy-efficient windows in their homes. A 2009 survey by the U.S. Energy Information Administration, in results released last month, shows that the percentage of homes with energy-saving double- or triple-pane windows rose from 36% in 1993 to 58% in 2009. How many of those windows were installed in new homes and how many were replacements the survey didn’t say.

But clearly companies that sell windows at the retail level are not wanting for energy of their own. Many vigorously promoted ARRA tax credits and reaped the happy result. They could do that because they’re marketing machines that know how to reach a buying public with products and offers.

So what’s starting to become evident is a shift to sell homeowners other products or services that can complete the job that windows started. One manufacturer I recently spoke with estimates that the market share of foam-backed vinyl siding, for instance, has doubled in the last five or six years. Its chief attraction? Enhanced R-value. And more home improvement companies are entering the solar arena. Many now offer blown-in insulation. Smart move. Studies show that more than 60% of U.S. homes are insufficiently (or not at all) insulated.

And then there’s air sealing, done as a complement to insulation. The Department of Energy contends that air sealing is the best dollar-for-dollar energy-efficiency investment a homeowner can make. Yet at the moment most people don’t even know what it means. “Go down the street and ask 100 people what air sealing is,” said the president of a large window company I spoke with last week. “You’ll be lucky if one in a 100 has any idea.”

By the way, his company now offers that service. Because if you explain what air sealing is, how much it costs, and what it can do to make the house energy efficient, some people want it. Services like air sealing and products such as insulation and solar systems are likely to continue gaining popularity for various reasons. Energy prices trend ever upward.

The economy may technically have wended its way past recession, but a hangover exists that makes consumers careful about how they spend. People are moving less, a result of the still-slow job market. And when they decide to stay in the place where they are, they want that place to be comfortable and affordable.

A number of factors doomed Home Star, but consumer indifference to the issues the bill addressed wasn’t one of them.


About girdharmalhotra

Extrovert, Very easy going, Love music
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