In his speech last Tuesday, President Obama defended the reputation of insulation, stating “See, I told you, insulation’s sexy.” His assertion that insulation is a hot and sexy building material is based on the cost-effectiveness of insulation for both new construction and retrofits. And when he stated that “if you saw $20 bills just sort of floating through the window up into the atmosphere, you’d try to figure out how to keep them,” he equates properly insulating a house with saving energy and money. And we agree—without question, insulation saves energy and money. Not only is insulation one of the least expensive and best methods of saving money on your utility bills, it also improves your house’s thermal comfort. So while the Building Technologies Program doesn’t claim expertise at sexiness, we applaud the spirit and message of Obama’s speech.
And insulation is also a key component in the federal government’s energy efficiency strategy. As the US seeks to reduce energy consumption from buildings in both the residential and commercial sectors, the concept of retrofitting or weatherizing existing building stock has come to the forefront of government policy. Vice President Biden’s recent report, titled Progress Report: The Transformation to a Clean Energy Economy, backs up the message of the cost-effectiveness and job creation potential of weatherization. According to the Progress Report, the $5 billion appropriated for the Weatherization Assistance Program (WAP) in the American Recovery and Reinvestment Act of 2009 (ARRA) will weatherize 500,000 houses by the end of 2010 and, combined with private investment, will weatherize 1 million houses by 2012.
In addition to increasing weatherization funding to $5B, ARRA has also increased the percentage of funding that can be used for training (to 20%), raised the WAP qualification cutoff from 150% of the poverty line to 200%, and increased the total per-house weatherization allotment from an average of $2500 to $6500. This $5B is a good investment not just for the receiving families, but also in terms of job creation. While the Progress Report fails to provide numbers on how many jobs weatherization should create, it does provide data on the expected job creation from other ARRA energy measures.
|Public Investment||Private Investment|
|Clean Energy Measure||$ (Billions)||Jobs created||$ per job created||$ (Billions)||Jobs created||$ per job created|
|Renewable energy generation and advanced energy manufacturing||23.4||253,000||92,490||43.3||469,000||92,324|
|Energy manufacturing facilities||2.3||17,000||135,294||5.4||41,000||131,707|
|Weatherization (2009 data, no ARRA appropriations)||0.25||8,000||31,250|
|Weatherization (2010 ARRA FAS estimates||5.0||(48,000-160,000)
Weatherization’s Role in Job Creation
The ARRA cost per job created ratio is a valuable tool for determining which measures are likely to produce the most jobs at the lowest cost. For example, while public sector investment in energy manufacturing facilities is very capital intensive and yields only one job for every $135,294 invested, renewable energy generation and advanced energy manufacturing is expected to yield one job per $92,490 invested. By comparison, over the past several years the WAP received $250 million in public funding, directly creating 8000 jobs and weatherizing 100,000 homes annually. This results in a job creation ratio of one job for every $31,250 of government investment—a highly efficient investment to job ratio. As the budget increases to $5B and the retrofit goal increases to 500,000 houses under the stimulus, the program can be expected to continue as one of the most efficient job creating programs in the clean energy sector.
Assuming that the current weatherization employment was scaled up directly with the additional funding, the additional funding would be expected to produce 160,000 new jobs. However, several factors will limit weatherization job creation well below this point.
First of all, as more money is spent per house (from $2500 to $6500) houses will be retrofitted with more expensive, less labor intensive measures such as new high-SEER HVAC systems and EnergyStar rated windows. And so while performing $6500 in retrofits will require more labor than $2500, it will not require over 250% more labor.
Second, as money spent on training and technical assistance increases from 10% to 20% of the budget, less money will go toward directly retrofitting the houses. However, the higher training and technical assistance appropriation is essential as the nation currently lacks the qualified weatherization professionals necessary to meet the higher weatherization goals. And without qualified retrofit professionals and specialists, weatherization money will be wasted as installation is not done properly and the program’s full energy efficiency benefits are not realized.
And finally, while the current $5B appropriation is theoretically enough to weatherize the 500,000 house goal at an average cost of $6500, additional program expenses for scaling up operations and state-level training are likely to decease the money available for weatherization wages.
Assuming a ratio of houses retrofitted per job created similar to the 2009 WAP ratio (12.5 houses/job), the program could be expected to create 48,000 jobs. However, this number is likely to under predict the job creation potential of weatherization as additional retrofit professionals will be needed on each house in order to perform the more extensive retrofit. Accounting for the additional workers needed to blow interior insulation and replace or repair HVAC systems, doors, and windows, a more realistic ratio would be 9 houses per job. This yields an estimate of about 70,000 jobs created at $71,429 of government investment per job. Even this fairly conservative job creation estimate demonstrates the relative cost effectiveness of the WAP and energy efficiency retrofits as compared with other clean energy sector investments.
And at a household level…
The WAP program metrics show that under the $2500/house program households save on average $350 annually on their utility bills, representing a 23% reduction in total utility bills. This reduction is especially important for low-income families as this sector pays, on average, 16% of their income toward utility bills, as opposed to a national medium of 4-5%. A key to reducing energy use is to decrease space heating and cooling needs as they together account for on average over 1/3 of a house’s energy use. And the key to reducing heating and cooling loads?
Insulation. See, just like President Obama told us, insulation could be a seriously sexy building material.
A few fun facts about insulation and using it in retrofits
What is referred to as insulation is a term for any material that significantly slows down or retards the flow or transfer of heat. Insulation is measured in terms of its R-value, which is a measure of resistance to heat flow/conductivity. This equation [DT/QA or, in the US, 1 hour* ft2*°F/Btu] measures only conduction, to which 25-40% of air infiltration is attributed in an average house. The other two means of air infiltration, convection and radiation, make of the remaining 60-75% of air infiltration in a given house, but are not generally considered when looking at the insulating properties of a material. The higher the R-value, the greater the resistance of the material and the better it insulates.
Insulation is classified primarily by form and by material. Insulation forms, for example, include rigid, semi-rigid, loose-fill, batt, flexible, reflective, and foamed in place. And common insulation materials include mineral fiber, organic fiber, and foam glass.
While not all types of insulation are appropriate for retrofitting, many interior and exterior/sheathing insulations can be effectively applied.
Surveying the retrofit case studies from the DOE Building America program, the most popular forms of insulation for retrofitting or weatherizing buildings include blown interior and rigid exterior insulations—specifically blown cellulose and polyisocyanurate rigid insulation/board. Additional types of insulation utilized include fiberglass bat, sprayed polyurethane foam, spray and rigid foams, and rigid insulation integral to both house wraps and siding. In all cases, the needs of the particular climate must be taken into account, but some form of insulation is almost always the most cost effective retrofit solution. For example, in Pasadena, “if you have 300 square feet of glass and you replace it, you go from R-1 to R-3 [which is the typical R value for new windows]. For a fraction of the cost, you can take the 2,000-square-feet of ceiling surface area and increase it from R-6 or R-10 to R-38 at the place where it really matters, in the attic.” (quote courtesty of Andrew Durben at HartmanBalkwin )
The chart below breaks down the cost savings and types of insulation used in six Building America retrofit cases.
|Location||Cost Savings||Key Insulation Materials in Retrofit|
|Concord, MA||$2031/year||Rigid foam on roof and walls, sprayed polyurethane foam in attic and foundation, blown cellulose in walls, XPS insulating sheathing under slab|
|Pasadena, CA||Electric bills halved||Blown cellulose in attic|
|Tucson, AZ||66-75% less heating and cooling||House and roof wrapped in polyisocyanurate board/rigid sheathing|
|Pittsburgh, PA||180 mBtu annually||Interior rigid foam in basement, fiberglass batt in basement, blown cellulose in walls and ceilings, sheathing with integral rigid polystyrene insulation, rigid foam and band joist spray foam in ceilings|
|Newburgh, NY||Habitat remodel—HERS of 89.7||Rigid foam XPS extruded polystyrene foam in walls and ceilings, fiberglass batt in floor joists|
|Wapato, WA||47% or 136.9 mBtu||Blow cellulose in walls and ceiling, fiberglass batt in ceiling, rigid insulation house wrap and integral foam insulated siding on walls, fiberglass batt floor assembly|