New Initiative Will Help Make American Homes More Efficient

The Obama Administration today announced a set of initiatives designed to help Americans make their homes more energy efficient and take advantage of solar power. The Fact Sheet describing the specific regulatory changes, of course, contains policy jargon and plenty of acronyms, but in practice it's pretty simplethese several measures help make homes and apartments use energy in smarter, more efficient, more affordable ways. This helps American families today and into the future.

The important backdrop is that America is in a clean energy transition. We are moving toward an electricity system powered by clean energy resources. (For more on the clean energy transition underway, see summary here, a full report here, and an annual update on advances by utilities here.) 

The several policies announced by the White House todaytitled the “Clean Energy Savings for All Americans” initiativeare narrowly focused on repairing and improving houses and apartment buildings. Making repairs and improvements to millions of houses and apartments is essential if we will achieve our ambitious clean energy goalsresidential housing uses over 20% of our country's total energy use, and managing this energy use better means a better utility system for all of us. Equally important is the personal perspective -- improving homes delivers great value to residents in utility savings and more. (For a description of the range of benefits from efficiency repairs, see EPA resources here, and a study of apartment buildings here.)

Three specific measures in the Administration's new initiative, announced today, deserve particular attention:

  • Thousands of homeowners who purchase or refinance their houses with mortgages supported by the Federal Housing Administration (FHA) and the Dept. of Veterans Affairs will be able to use a new kind of home improvement loan“PACE” financingwhich is designed to provide the funds needed to make efficiency repairs, improvements, or add solar panels. PACE stands for Property Assessed Clean Energy because the customer's monthly loan payments are tied to property taxes, and PACE programs are implemented and operated by states and localities. FHA and VA acceptance of PACE is accompanied by new guidance to PACE loan programs on the consumer protections and best practices that should be required for lenders to make PACE loans. Delivering this guidance is important. Basic consumer protections must be emphasized and prioritized, and such protections deserve continual review and scrutiny to assure consumers and regulators have confidence that programs deliver the promised benefits.
  • Dozens of communities will receive assistance to implement Community Solar initiativesan important way for familiesincluding rentersto participate in a solar electricity facility without investing in panels installed on their own property.​​​​​​​​​​ These structures can help low to moderate income families in particular to participate in the advantages that solar power can offer. 
  • States will have new flexibility to use funds from LIHEAP (the Low Income Home Energy Assistance Program) to help low-income customers repair their homes and apartments to prevent high utility bills, instead of using the funds to simply pay a portion of the families' utility bills. This is smart and needed adjustment. This regulatory  flexibility should enable states to experiment with investing in lasting improvements to homes instead of continually paying high bills year after year.​

The measures announced today in the President's new initiative are one in a much longer list of initiatives the Obama Administration has implemented over the past 8 years to make our clean energy future a reality. Continual improvement is often required to achieve policies that work well in the marketplace. The Obama team has done great work to regularly examine how to improve, sometimes with big measures, sometimes with fine-tuning. These measures focused on housing should deliver benefits to American families for years to come.

About the Authors

Philip Henderson

Senior Financial Policy Specialist, EEFA, Resilient Communities, Healthy People & Thriving Communities Program

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