What Types of Incentives would the Proposed HOME STAR Program Offer?

Emily Zimmerman
Publication Date: 
April 1, 2010

HOME STAR – nicknamed “Cash for Caulkers” – is a proposed federal program that would provide direct incentives to homeowners who invest in improving the energy efficiency of their homes. In addition to allowing Americans to see immediate savings of 5 – 40 percent on their energy bills, the program could also provide direct economic benefit by putting hundreds of thousands of unemployed Americans back to work and stimulating demand for building materials produced by American factories.

What are the Proposed Incentives?

  • SILVER STAR: Homeowners would be eligible for rebates of $250 to $1,500 for the purchase and installation of energy-saving equipment including furnaces and water heaters or for home performance improvements such as better insulation, windows and air sealing. Cap – Up to 50 percent of project cost or $3,000 per/home.
  • GOLD STAR: Homeowners would be eligible for rebates of $3,000 for retrofit measures that would result in 20 percent energy savings, and then an additional $1,000 for each additional 5 percent of energy savings. This path requires working with a qualified contractor to conduct a home audit and tailor/implement a retrofit plan. A percentage of projects would be audited to ensure that the improvements perform as expected. Cap – Up to 50 percent of project cost or $8,000.
  • Project Financing: In all of the scenarios described above, homeowners would be required to come up with at least 50 percent of the upfront costs. To make sure that more households are able to take advantage of the program, the HOME STAR proposal includes support for state and local entities to be able to provide low-interest financing to assist with the portion of the costs that homeowners are responsible for.

How can Utilities Participate in HOME STAR?
HOME STAR is likely to provide new savings opportunities for some systems and their customers. The latest program outline proposes the development of a network of “rebate aggregators” to provide back-end support such as reviewing rebate applications and facilitating the delivery of rebates. Entities would also be selected to perform quality assurance audits. Utilities that already have residential retrofit programs, have established quality assurance provider networks or demonstrate that they can perform these functions are among those eligible to apply to be rebate aggregators and quality assurance implementers. Utilities are also able to participate as “qualified financing entities.” The proposal directs the U.S. Department of Energy to develop guidelines that allow participating utilities to count the energy savings towards State-level energy savings targets.    

What is the Likelihood of HOME STAR Becoming Law?
HOME STAR’s prospects should be known within the next several weeks. The proposal has strong support from a coalition that includes product and equipment manufacturers, retailers, contractors, environmental and energy-efficiency groups and labor advocates who want to see the anticipated energy savings and job creation benefits realized. HOME STAR has also been warmly embraced by the Obama administration, but funding and implementation of the program require congressional action.

EDITOR'S NOTE: On April 15th, the the House Energy and Commerce Committee approved the bill by a vote of 30-17.

How would HOME STAR affect your utility?
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