Industry sector: Energy efficiency

Innovation Economy
‘Cash for Caulkers’
Firms that do energy audits could benefit from new federal funds
By Scott Kirsner
Globe Columnist / December 13, 2009

On a chilly Tuesday morning last week, Steve Garwood was pointing an orange hand-held infrared camera at the walls of Ceci Mendez’s bedroom, showing her where the 50-year-old home was letting in cold air from the outside. In Mendez’s basement, Shawn Boilard was cutting sections of foam insulation to be fitted around the pipes connected to Mendez’s furnace.

By the time Garwood, Boilard, and a third team member from Next Step Living Inc. left the house around lunchtime, they’d found ways to reduce Mendez’s annual energy bills by about $260 per year - and significantly reduce the carbon “footprint’’ of her small Roslindale home.

This kind of “Extreme Energy Makeover: Home Edition’’ could become much more common in 2010 in Massachusetts and across the country, if a new federal stimulus program called Home Star, intended to encourage energy-saving home improvements, wins approval in Washington. (Home Star has also been dubbed “Cash for Caulkers,’’ to echo the name of the program that helped goose car sales last summer.)

Founded last year, Boston-based Next Step could be one beneficiary of the stimulus, since the start-up has developed a streamlined, no-hassles approach to conducting a home energy audit, and then making some small-but-critical fixes before its crew departs. But it will also help hundreds of small businesses and sole proprietorships around New England that do assessments of a home’s energy use as well as install new insulation, replace old furnaces, and repair roofs and attics that leak hot air.

And interestingly, Steve Cowell, the founder of a 25-year-old Westborough nonprofit, Conservation Services Group, has been working directly with the White House to shape the specifics of how the Home Star program could work.

Many homeowners may not realize that they can get a free or deeply discounted audit of their home, courtesy of Mass SAVE, a public-private partnership intended to encourage energy conservation, or programs such as Renew Boston, which earlier this year received $6.5 million of federal stimulus funding, and which paid for the audit and upgrade work at Mendez’s home last week.

“I really couldn’t believe it was going to be free,’’ says Mendez, an art gallery manager who bought the home in May. “I mean, who knows about that?’’

An audit typically examines a home’s construction, heating system, insulation, showerheads, light bulbs, and how well doors are sealed, with the goal of making recommendations about the changes that are likely to have the biggest impact on the homeowner’s utility bills. More sophisticated audits install a special “blower door’’ apparatus in an exterior door frame to suck air out of the house at a regular rate, and then rely on an infrared camera to see where cracks or areas of inadequate insulation are allowing colder outside air in.

Many energy auditors stop at the analysis stage, feeling that selling insulation services or fluorescent light bulbs as well might make them seem biased to persuade homeowners to spend more than necessary. Flemming Lund, the Sudbury-based owner of Infrared Diagnostics LLC, is in that camp.

“I’m not there to sell you new windows, but I can recommend some contractors to do things, and I can also give you advice about which things you can do yourself with a trip to Home Depot,’’ says Lund, who charges an average of $425 for a home energy audit. ($400 to $500 is typical for an audit that doesn’t include any upgrading work.)

Next Step Living combines the audit with some action, as does Conservation Services Group. “If you’re going to be in the home anyway doing an audit, you might as well get the low-hanging fruit, and help them get excited to do deeper work later,’’ says Geoff Chapin, founder of Next Step.

Next Step’s three-hour home visit costs $599 - but it has been offered at no charge to hundreds of Boston homeowners through the Renew Boston program, which covers the cost. Utilities in other cities provide a rebate of about 75 percent of the visit’s cost for many customers, and some local employers have also begun covering the rest of the cost as an employee benefit, Chapin says.

Garwood says that the auditors almost never suggest replacing windows (though Mendez has already decided to do that, since many of hers are painted shut). Instead, the company tries to better seal the home so that heat doesn’t escape to the attic and out through the roof. A suggested improvement to Mendez’s home, for example, is better insulating the attic, which would cost about $2,700. But the project would be eligible for a utility rebate and a federal tax credit that could make the improvement pay off in about a year and a half, according to Garwood’s estimate.

“It’s remarkably unglamorous stuff,’’ says Adam Parker, president of Conservation Services Group, “but if you do it right, you can reduce your energy use by 15 to 40 percent.’’ His nonprofit, which has 600 employees, will bring in more than $90 million in revenue this year.

The stimulus funding being considered in Washington could set aside $9 billion for homeowners’ energy efficiency projects. Cowell has estimated that the money could create 235,000 new jobs and nudge 450,000 homeowners to commit to making energy improvements. Buying more efficient appliances would trigger a payment from the government of 50 percent of the purchase price, and other cash would flow to those who reduced their home’s total energy usage. (An interesting question: Will the coming congressional debate over the new program spur homeowners to put off improvements until it is rolled out, hoping for better reimbursements in the future?)

“Home energy use,’’ Chapin notes, “is 21 percent of the climate problem.’’

Of course, billions of dollars of stimulus would both create new “green collar jobs’’ in the energy efficiency industry, and also a bit of a gold rush mentality. Lund, who got into the business five years ago after working as a home inspector, says it’s important that anyone marketing themselves as an auditor be certified by the Building Performance Institute. He also says audits before and after energy efficiency work is done will be important, so that you can objectively determine whether the work has actually made a difference. Parker says quality assurance ought to be a big component of any government spending program.

Anticipating the coming frenzy in the energy efficiency sector, Parker says, “We’ve been doing this for 25 years now, and it kind of feels like we’re this band that has been around forever playing great music, and all of a sudden everyone discovers you.’’

“There’s a danger,’’ he adds, “that energy efficiency becomes the flavor of the year in 2010, and I’m hoping that doesn’t happen - I hope it has some real legs.’’

Scott Kirsner can be reached at kirsner@pobox.com.
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