When a home energy audit pays

By Steve Hargreaves, staff writer

NEW YORK (CNNMoney.com) -- The government is expected to unveil a new program in the next couple of months that if approved may reimburse homeowners for up to half the cost of making their homes more efficient, but don't start shopping for new kitchens just yet.

Homeowners will get the most return for the money in simple upgrades like caulking the windows, putting insulation in the attic, and changing the light bulbs - not new windows, refrigerators or dishwashers.

What's on the table

The average American home wastes a lot of energy.

A complete energy retrofit - which could include caulking and insulation as well as new windows, appliances and boiler, could slice a home's energy consumption in half, according to Lane Burt, manager of building energy policy at Natural Resources Defense Council.

But getting all that work done might run into the tens of thousands of dollars. And any new federal program - which is still being drafted and is not guaranteed to become law - would cap the government reimbursements at $12,000, said Burt.

Homeowners need not despair. There are some simple improvements that are relatively cheap and can pay for themselves quickly.

Just adding the insulation, caulking and lights might run an average homeowner $5,000 to $7,000, he said. That could shave about 30% off a home's energy bill each month. And if the government picks up half the cost, the payback time for homeowners would be just a few years.

"It's a win-win-win," said Burt. "It creates jobs, it saves energy, and it saves consumers money."

Consumer watchdog groups back up Burt's claim.

"I don't know of anyone who's looked at them and said they are not a good idea," said Mark Cooper, director of research for the Consumer Federation of America. "The average consumer can save a big chunk of change by getting the work done."

What to look for

Experts say there are a few things to look for when getting an energy audit and retrofit work done.

First, find a contractor licensed by the Building Performance Institute or the Residential Energy Services Network. These contractors have been trained to first test a home and see how much energy it is losing, then make renovations on all the systems in the building.

As of now there are no incentives in the proposed program for do-it-yourselfers. That's partly because the program is designed to create jobs by putting out-of-work contractors back on the job. But it's also done to ensure the work is done right - a house that's sealed up too tight could rot from mold or trap too much carbon monoxide.

Second, hire an energy contractor using the same diligence you would with any other contractor. Call around for price quotes and check references. If you have any problems report them to your state's attorney general.

The big picture

The proposed program is part of a broader jobs initiative designed first and foremost to put people back to work.

The original proposal, which called for $23 billion to be spent on energy retrofits, was estimated to create over half a million jobs, according to CleanEdison, an association of green building professionals.

Those familiar with the proposal say the final bill may set aside $10 billion for energy retrofits. Still, it's a lot more than is currently being done - while some states have reimbursement programs, there is no federal plan. The original stimulus bill contained $5 billion for low income homeowners and money to retrofit federal buildings, but nothing for middle income Americans. The new proposal has no income restriction.

But in addition to creating jobs and saving consumers money, it also lays the framework for an energy efficient economy and achieving the 80% reduction in greenhouse gases most scientists say is necessary to avoid the worst impacts of global warming.

That's a target that can't be hit with building wind farms and solar plants alone.

Some 40% of all energy used in this country goes to buildings, mostly in the form of heating, cooling and lighting.

"You don't get an 80% reduction by 2050 without retrofitting nearly every building in the country," said Burt.  To top of page

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