Home Star Legislative Summary

Bill Information

Full Title: Home Star Energy Retrofit Act of 2010 (“Home Star”)

Note: This summary reflects the current Senate bill and House Energy and Commerce Committee-passed bill. The bill that passed the House amended sections on financing, rebate processing, and budget neutrality.

Summary

Home Star would provide rebates to homeowners who retrofit their homes with energy efficient equipment and materials. The proposed legislation would create two rebate programs, one for specified energy-saving improvements and one for whole-home energy use reductions. Home Star also grants money to states for complementary financing programs and funds administration and technical support through states and the Department of Energy (DOE). The Senate bill authorizes $5 billion for the program.

Silver Star Rebate Program

The Home Star proposal directs two-thirds of rebate funding, around $2.8 billion in the Senate bill, to the Silver Star Rebate Program. Silver Star would give rebates to homeowners for installing specific energy-saving measures, including envelope efficiency upgrades and efficient equipment installation. The legislation specifies a rebate amount for each type of measure installed, ranging from $250 for installing two doors to $1,500 for specified insulation and equipment, and up to $3,000 per home. To qualify for the Silver Star program, measures must be installed by a certified contractor within one year of enactment.

In addition to the contractor-installed improvements, Silver Star also provides small “do-it-yourself” rebates for homeowners to install high-efficiency insulation in their own homes.

Gold Star Rebate Program

Home Star provides the remaining one-third of rebate funding, around $1.7 billion in the Senate bill, to homeowners achieving whole-home energy use reductions through the two-year Gold Star program. Gold Star rebates are based on simulated savings from an energy audit, starting with $3,000 for 20 percent savings, and increasing by $1,000 for each additional five percent improvement, up to $8,000 per home. Gold Star rebates require installation by contractors with a higher tier of certification than the Silver Star program, encouraging worker training and long-term investment in the building performance industry.

In both Gold Star and Silver Star, all existing residential buildings of four units or less are eligible for the program. In addition, rebates may only cover up to 50 percent of the cost of the improvement and may not be added to existing federal tax credits for energy efficient homes.

Financing Program

Home Star provides $200 million in formula grants to states to support energy efficiency financing programs. The state, or a designee, may use the grant to provide credit support and interest rate buy-downs for a number of loan products, including on-utility-bill payment, property-assessed clean energy (PACE) financing, municipal service charges, and traditional loans. The legislation requires the loan delivery entity to report regularly to DOE on program participation, job creation, energy savings, and default and repayment rates.

Rebate Processing

The Home Star bill sets up a framework for rebate processing that involves the contractor, the DOE, and a new intermediary entity, the rebate aggregator. Rebate aggregators provide processing support between the many disparate contractors and the DOE in order to streamline the process. They may include utilities, state agencies, retailers, software companies, large contractors, or any public or private entity that demonstrates sufficient rebate processing capabilities and energy efficiency experience. Homeowners receive the discounts from the contractor at the point of sale and are not involved in rebate processing.

To process a rebate, the contractor must apply with the rebate aggregator, who reviews the application for completeness and accuracy and files it through a new federal rebate processing system within the DOE. DOE is to develop model application forms within 30 days of enactment of the legislation. Upon receiving the application, the rebate aggregator has 30 days to review and submit the application, receive funds from the DOE, and distribute the rebates to the contractors.

Quality Assurance

Home Star directs states to oversee a network of quality assurance providers to ensure proper retrofit installation and measurable energy savings for consumers. The legislation requires that 20 percent of Silver Star homes and 15 percent of Gold Star homes be inspected by quality assurance providers, which may include Building Performance Institute (BPI) and Residential Energy Services Network (RESNET) certified home performance analysts. In the event of a failed inspection, the contractor has 14 days to correct the installation or face a $15,000 fine.

Home Star requires that contractors are licensed and insured in order to install retrofits. To install measures in the Gold Star program, the contractor must also be BPI certified.

Impacts

The Home Star legislation, if enacted, would have far reaching impacts. According to the Home Star Coalition, the legislation would create 168,000 jobs, save Americans more than $10 billion dollars on their energy bills over 10 years, and reduce global warming the equivalent of taking 615 thousand cars off the road.