The Stimulus: A Final Analysis

On Tuesday, President Obama signed the $787 Billion American Recovery and Reinvestment Act into law. The act is estimated to save three and a half million jobs over the next two years.

We’ve kept an eye on it through its development, and I want to give an update as to what made it out the other side and into law. My comments on building related portions are below. A more inclusive evaluation of the stimulus’s green measures by the Alliance to Save Energy can be found here and here.

  • DOE’s Weatherization Assistance Program: $5 Billion
    • The House version of the bill allocated $6.2 Billion and the Senate version set aside $2.9 Billion. The final version ended somewhere in the middle. With the amount of money allowed per home increased to $5,000, the program aims to retrofit roughly 1 million homes in the next two years. As we’ve said before, this has the potential to be a really great thing for the economy, energy independence, and national carbon footprint. That said, scaling the program up from $227.2 Million to $5 Billion (22 times larger) will require a monumental effort in management, training, and data analysis. I will post more about our thoughts on this in a separate post.
  • Retrofitting Federal Buildings – $3.6 Billion for Department of Defense (DOD) energy efficiency projects and modernization of facilities, $4.5 billion to GSA for measures to convert GSA facilities to High-Performance Green Builings, $400 million to establish the Office of Federal High Performance Green Buildings, $75 million for Defense-wide funding of research, development, text and evaluation projects, including pilot projects, demonstrations, and energy efficiency manufacturing enhancements
    • This is a bit different from what was proposed in the senate and house bills. The House version gave $6 Billion to GSA for improving GSA buildings and $1.7 to DOD for energy efficiency projects and building improvements. The Senate version had the same two measures, but funded at $2.5 Billion and $3.2 Billion, respectively. The senate version also contained $200 million for research ($75 million in the final law), $250 Million for improving the Department of Health and Human Services facilities and $323 million for energy-related construction at the Department of Veterans Affairs medical facilities (both cut from the final).

The final version of this should drastically improve the state of federal buildings, making them more energy efficient and safer, saving tax-payers billions in spending on federal energy bills. The creation of the Office of Federal High Performance Green Buildings will be another great step towards the legislation of “high performance” buildings. Kelly Shultz, our Building Technologies intern, is currently writing a paper on the history of high performance legislation, as well as recommendations for future coordination and implementation. I’ll post this paper in the coming weeks, which will elaborate on the importance of this office.

  • Retrofitting HUD Buildings: $2.25 billion for energy retrofit investment grants and loans for Section 8 Project-Based program; $1 billion from the Public Housing Capitol Fund funding to fund improvements in energy efficiency; $2.25 billion for the HOME Investment Partnerships Program to help build and rehabilitate low-income housing; $510 million for Native American housing block grants, to include improvements in energy efficiency
    • This didn’t change much from the senate and house versions of the bill. This section is interesting, because it puts a lot of money into retrofitting buildings at the Department of Housing and Urban Development. Currently there isn’t any sort of coordinated retrofit program at HUD, making this an equal large managerial challenge as the weatherization program increases. However, there is a 1 percent set aside for program management, research, etc., which will aide in running the program. We think this program should be coordinated with the weatherization program, federal building retrofits, and all other retrofit efforts to take best advantage of both the money invested and the opportunity to improve our energy use and climate impact.

  • Decoupling and Higher Energy Codes: $3.1 billion for the Department of Energy’s (DOE’s) State Energy Program (SEP), which provides grants and funding to state energy offices for energy efficiency and renewable energy programs conditioned on state Governors’ assurances regarding regulatory policies, building code requirements and the prioritization of existing state programs.
    • I’ve mentioned this section before, and I’m curious how far it pushes the bar on decoupling. Basically, Section 410 of the bill stipulates that a first round of grants will be given based on current allocations, and sets conditions on the states for them to obtain the second round of energy conservation block grants. The conditions are that the governor has to notify DOE that s/he has “obtained necessary assurances” that: (a) the state’s regulatory body will “seek to implement” a policy to make sure utility financial incentives are “aligned” with energy efficiency — which is a weak way of pushing states towards decoupling (but not mandating it); and (b) the state will adopt the latest IECC code for residential energy efficiency and the ANSI 90.1-2007 code for commercial building energy efficiency. At the end of the day, the Act doesn’t require either decoupling or code improvements, but it incentivizes them, with a rather weak incentive for decoupling (but an incentive, nonetheless), and a relatively strong incentive for adopting higher energy codes.
  • Green Schools: $9.75 billion for public safety and other government services, which may include assistance for elementary and secondary education and public institutions of higher education, and for modernization, renovation or repair of public school facilities and public institutions of higher education facilities, including modernization, renovation, and repairs that are consistent with a recognized green building rating system
    • The original House version of the Act had $14 Billion for school modernization. Which has been trimmed and watered down, offering less money and less emphasis on energy efficiency measures.
  • Green Jobs: $500 million for research, labor exchange and job training projects to prepare workers for careers in energy efficiency and renewable energy industries, and up to $37.5 million provided for Job Corps Centers, which may include training for careers in energy efficiencyo
    • This is an interesting provision that I haven’t read into in enough depth. One of the largest obstacles in the implementation of the Act and its long term impacts on the shape of the economy/job force will be the training of a new “green” work force, and it is important that money be placed aside to the development of curriculum and training of workers. I will read more into this and post what I find.

Overall, I think that while some of the money in the House and Senate versions of the bill have been trimmed down or eliminated, there is still a very significant amount of money being placed into improving our nations building stock, with a keen eye on improving energy efficiency. This will create a large number of jobs, and will take advantage of buildings as the low hanging fruit in our national energy consumption reductions. The Act carries with it many massive managerial challenges for different government agencies, and it remains to be seen how these will be handled. That said, I remain hopeful that this Act will bring our nation’s economy and energy consumption back in a positive direction.

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