Residential Retrofit: At the Nexus of National Energy Policy Stephen Cowell, CSG June 18, 2010

Overview 20 years of state-by-state policy: Regulations and appropriations National policy beginning with Obama Administration Residential Energy Efficiency is the best jobs program: - 92+ % of all products made in USA - 100% of all jobs are local

Lessons Learned from ARRA Use of Davis Bacon, Buy American and NEEPA rules difficult to administer in residential retrofit Procurement chain from Federal-State-Local-Contractor is a slow process DOE needs staffing and focus to manage significant new role

Active HOME STAR Coalition Broad support Industry Labor and Social Justice Energy and Environmental Advocates Over 1,500 organizations www.homestarcoalition.org Status of legislation: Passed House of Representatives 5/6/10 (246 to 161) Reintroduced in Senate & referred to Senate Finance Committee 5/27/10

HOME STAR $6 Billion* Cost: $6 Billion Homes: 3.3 Million SILVER STAR $3.6 Billion GOLD STAR $1.8 Billion Financing / QA / Admin $600 Million *(Senate: 1B Tax Credit) Cost: $6 Billion Homes: 3.3 Million Jobs: 168,000 Homeowner Saving (10 yr.): $9.4 Billion Equivalent Cars Off-Road: 615,000 Cars Power Generation Offline: 4 x 300MW Plants

Quality Assurance Provider HOME STAR Program Actors State State Energy Office regulates QA providers network., local program coordination, infrastructure development. State designates HOME STAR Financing entity. Federal Rebate System Federal Database system that tracks jobs uploaded by Rebate Aggregators, notifies QA providers, and processes rebate requests. Third party (non contractor) entities that conduct on-site quality assurance inspections, insure contractor eligibility. Entities delegated to RESNET or BPI QA providers, existing state residential efficiency program, or entity designated by the Secretary. Quality Assurance Provider Entity that aggregates job data and rebate forms, checks to ensure eligibility and accuracy, uploads to Federal Rebate System, then distributes payments to contractors. QA providers, Existing Residential Retrofit programs, and national companies are all eligible to be Rebate Aggregators as determined by the secretary. Companies that contract with homeowners can perform Rebate Aggregator role but not QA role. Rebate Aggregator Contractor Company that enters into contracting agreement with homeowners. Silver Star Contractors eligible with License and insurance. Gold Star requires BPI Accreditation or other standards approved by the Secretary.

Legislative Design Objectives Primary objective: move quickly to create jobs based on existing infrastructure Establish program elements in legislation to avoid the need for extended rule making or procurement Let the market work: Work through predefined organizations and networks Insure both short-term job creation and long-term quality jobs through financing, standards, and enhanced infrastructure Build a broad coalition that can support a bi-partisan solution

Integration of Home Star and Existing State Programs Existing programs provide Rebate Aggregation + QA Adjust existing programs to accommodate new Federal $ Use Home Star funds to the State to introduce or expand components: financing, QA, training Challenge: Integrate multiple non-program Rebate Aggregators (Home Depot, etc)

MA 1- 4 family Residential Programs Mass Save plus Cool Smart Provides: incentives for a range of measures, audits, financing, equipment replacement, and training Home Star impact Use Federal $ as the base; layer on state dollars to keep program design but expand participation levels and type of measures Federal $ fund expanded QA services Freed up state funds: Increase participation and infill/augment services; expand targeted initiatives outside Home Star such as multi-family; or community mobilization efforts Must supplement and not supplant existing efforts

Integrated Policies Forward Capacity Market rules-Regional State Energy Efficiency Resource Standards State and/or Federal Building labeling National Rebates and incentives combined with state regulatory policies How to integrate multi-level action Can we avoid being the policy “flavor of the day”

Challenges for Federal-State-Utility-Industry Roles Multiple jurisdictional oversight Define how authority and action is coordinated Standards and certification Role of industry standards or public standards Competing interests driving action at each level DOE role after decades of passive involvement

Thank you! Steve Cowell stephen.cowell@csgrp.com 508.836.9500 x13259 www.csgrp.com