Improving Home Improvement Incentives
My friend Luke, who leads Durham-based startup VisibleEnergy and blogs on energy, efficiency and sustainability, recently shared a great article from Good Magazine.
After discussing the importance of scaling home efficiency improvements in order to create major change rather than just plugging holes in a dam, the article went on to propose the following as a potential solution:
“And that’s why the 14X Stimulus Plan is so interesting. Santa Fe-based architect Edward Mazria, who heads Architecture 2030, proposes that instead of directly funding building renovations, we incentivize them, through the $6.3 billion in energy-efficiency grants that’ll begin flowing this June.
As Mother Jones reports, cities would offer homeowners and private business the chance to refinance their buildings at a lower interest rate, with one caveat: The more your interest-rate goes down, the more efficiency upgrades you have to make. Architecture 2030 estimates that a family paying six percent on a $230,000 loan could install a $20,000 system of solar panels and save $425 a month.
The “14X” name came about because Mazria estimates that for every stimulus dollar spent on his plan, $14 in economic activity would be created in the building sector and beyond (a compounding effect that’s well-documented for incentive programs). Every $1 would also generate $3 in federal taxes, and $1 in local taxes. And, according to Mazria, if you simply spend $3.2 billion building green infrastructure directly, you create 49,486 green jobs. But if you spend it on 14X’s interest-rate based incentives, you create 692,800. Maybe those numbers are high, but that’s about as close to a magic bullet as you’ll ever get in public policy.
Banks, the Department of Energy, and a slew of mayors are already excited about the plan. You can actually sign a petition supporting it here.”
