The Town of Babylon New York has come up with an innovative way to secure upfront capital for a large-scale energy efficiency and weatherization retrofit program for residential buildings.
Babylon’s “Long Island Green Homes Initiative” is an ambitious plan to perform energy efficiency retrofits on all of the town’s 65,000 homes. At no upfront cost, the program provides homeowners with the capital to perform retrofits on their properties and connects them with trained workers to make the improvements.
According the Energy Information Administration, buildings account for 40% of all U.S. energy consumption. Reducing that demand is a critical step towards a clean energy, good jobs economy. Fortunately, there are millions of American’s with the existing skills, or who could be easily trained to perform energy efficiency and weatherization retrofits that would dramatically decrease energy use. The best part is that these jobs cannot be outsourced beyond our borders.
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The Apollo Alliance and its allies have been hard at work creating, identifying, and supporting policies and initiatives that promote large-scale energy efficiency and weatherization retrofit programs. By performing retrofits on many buildings as part of the same program with a shared financing mechanism, costs are reduced, job quality standards can imposed, and many secure local jobs can be created. Cities around the country are considering residential retrofit programs but many are struggling to secure the upfront capital to fund them.
Babylon is using an unprecedented financing mechanism to secure startup capital for the program. By identifying carbon as a solid waste, the town was able to allocate $2 million from its solid waste management fund for the pilot program without having to go through an extensive legislative process. “With record high energy costs for residents and the threat to our planet from global warming it is now an economic and moral imperative for local governments to implement programs that will reduce the energy waste from existing homes,” said Town Supervisor Steve Bellone.
Green Building Code A National Model
The town previously enjoyed the national spotlight in May of 2005 when they announced a “Clean Energy Plan,” and again in December 2006 when Babylon adopted the most aggressive green building code in the country. The code requires all commercial and industrial building projects over 4,000 square feet to meet minimum LEED standards. The town has since been identified as one of the Sierra Club’s “Cool Cities,” following a commitment to reduce carbon output 12% by 2012. The Green Homes Initiative is a key component of the town’s new Climate Protection and Sustainability Plan, which is in the process of being converted into an operations manual.
For the city, the program’s price tag is small. Homeowners pay back the city back for the costs of their upgrades out of their energy bill savings. The loan agreement is placed on the deed of the residence and in the event of sale, it transfers to the new owners. Certified energy auditors determine how much money will be saved by the improvements and establish a repayment period with a low 3 percent interest rate to cover administrative costs.
For example, the Chambers family had about $8,000 worth of retrofit work done on their home and will pay the city 80 percent of their projected $100/month energy savings over the next eight years. According to the town, the average repayment period for the homes retrofitted so far is 7.75 years at an average cost of $6,845 per home.
Energy Savings and Lower Costs
Participants have seen their energy bills drop an average of $984/year. The result is a net savings for homeowners and a more comfortable and environmentally friendly home with a higher resale value. “The overwhelming majority of residents will see a positive cash flow right from the start,” said Bellone.
The program is available to all residents regardless of income or credit history and the audit includes a free health and safety inspection. The only homes not eligible are those that use so little energy, or are already so efficient that the energy savings from retrofits would not be big enough to pay back the cost of the work within ten years.
Certified and Generating Green-Collar Jobs
Since the town board approved the initiative last August, city-appointed Building Performance Institute (BPI) certified contractors have completed improvements on over 57 homes and performed audits on an additional 102 homes that are now in some stage of the program. The Building Performance Institute is an independent entity that establishes widely recognized standards within the building trades. BPI certification assures skill, health, and safety standards in addition to the already high standards of Plumber’s Local 200 whose members perform the heating improvements. According to Project Director and Chief Operational Officer Sammy Chu, entry level workers are making $15/hour or more and lead mechanics are making $25/hour or more with benefits.
Babylon officials project that as more people take advantage of the program it will create thousands of green-collar jobs. In order to prepare workers to meet the increased demand for services from local homeowners, the town is collaborating with the Western Suffolk Board of Cooperative Educational Services to provide training in energy auditing.
“There are very few trained professionals to conduct home energy audits,” said Supervisor Bellone. “We need to provide the necessary training in this green-collar job market to fulfill the dearth that currently exists.” Plumber’s Local 200 is also providing training for the work performed by heating contractors in addition to manufacturer-based training available for a number of the appliances being installed in the homes. “The Plumbers Union Local 200 will develop the specific training programs needed for plumbing technicians to be able to install and service the newest energy efficient systems,” said Plumbers Local 200 Organizer Art Gipson.
The town recently announced that they are expanding the program to provide funding for the installation of solar panels on homes that have already been retrofitted or meet certain energy efficiency requirements. This will result in even greater energy bill savings and a dramatic reduction in the energy demand and subsequent carbon footprint of Babylon’s residential building stock.
Mr. Chu is confident that if the pilot program succeeds they won’t have any trouble finding additional capital to further expand the program. “Feedback from residents has been very positive,” said Chu “we don’t have time for cynicism.” Chu has also been receiving calls from a number of other cities and towns looking to follow Babylon’s lead, and policy experts from around the country are looking at Babylon’s innovative program as a promising mechanism for reducing carbon pollution, creating green-collar jobs, and stimulating local economies.
Mac Lynch is the program associate in the San Francisco office of the Apollo Alliance.