The U.S. Department of Energy last week announced over $40 million in federal funding for an array of demonstration projects that will test innovative approaches to delivering home energy retrofits to low-income and underserved households.
The funded projects compellingly showcase how the Biden administration can leverage the longstanding Weatherization Assistance Program (WAP) to reduce carbon emissions from the building sector by lowering energy usage and integrating renewable energy sources, all while lowering energy costs for financially struggling American households. But unlocking the program’s potential at scale will require reforms to how it operates – including dedicated funding for home repairs and more flexible spending rules.
Pilot Projects Illustrate Program’s Potential to Drive Equitable Building Decarbonization
Last week’s funding announcement comes via two competitive grant programs operated by the Energy Department’s weatherization office: the Enhancement and Innovation program, which funds innovative demonstration projects by government and non-profit entities, and the Sustainable Energy Resources for Consumers program, which supports efforts by states operators to integrate sustainable energy technologies into their weatherization programs.
The bulk of the funding ($36.5 million) is for twenty-one Enhancement and Innovation projects scattered across the country. These projects will test out creative approaches to delivering deep energy retrofits, often in combination with renewable energy sources, while pro-actively addressing the barriers that have too often prevented underserved communities from accessing weatherization assistance. For example:
- The Native to Native Energy Sovereignty project will develop a replicable, Indigenous-led model for delivering deep energy retrofits and renewable energy upgrades in some of the poorest counties in the U.S.
- Elevate Energy will create a “one stop shop” program to address health and safety issues and weatherization, creating job opportunities for workers of color and minority-owned contractors.
- The Philadelphia Energy Authority and the city’s green bank will partner to deliver comprehensive energy retrofits to at least 250 homes in historically marginalized communities, including electrification and rooftop solar.
- The Interstate Renewable Energy Council will build out an outreach and technical support program to recruit “a new generation of WAP workers,” including women, minorities, and other underrepresented groups.”
Another $5.1 million will flow to state program offices to integrate distributed energy technologies such as solar panels, energy storage, and electric water and space heater as part of their weatherization programs.
Proposed Legislation Could Help Unlock Program’s Potential
The projects announced last week compellingly illustrate how WAP could be leveraged to drive equitable building decarbonization in the United States—yet the announcement also underscores how far the program still needs to go. Outside pilot programs, it is rare for state weatherization assistance programs to fund renewable energy upgrades or electrification, with exceptions. This is due in part to stringent restrictions on the use of program funds, including caps on the ratio of installation costs to estimated energy savings and the total cost per project. (Where such services are offered, states typically use more flexible funding from the Low Income Home Energy Assistance Program.)
There is also a need for more flexible program dollars to address home repair issues and environmental hazards (such as asbestos or lead paint) that too often prevent households in need from accessing assistance. Home repairs can be expensive and do not usually result in direct energy savings, so they can easily run afoul of the cost-effectiveness and total cost restrictions noted above, rendering the household ineligible for assistance. Because lower-income households and households of color are more likely to live in housing in need of repair, they are especially likely to be excluded for this reason.
In Pennsylvania, state legislators recently approved a Whole Home Repair Program that will squarely address this issue by providing flexible funding for home repair issues that prevent households from accessing weatherization assistance. This first-in-the-nation program will also make it easier to access assistance programs by providing a one-stop shop for assistance.
Pending legislation would take a similar approach at the federal level. The Weatherization Enhancement & Readiness Act, introduced by U.S. Representative Paul Tonko (D-N.Y.), proposes to allocate $90 million annually over five years for a “Weatherization Readiness Program” within WAP that would similarly provide flexible funding for home repair issues that present a barrier to weatherization. (A pilot Weatherization Readiness Program was created through the 2022 budget process, but only received $15 million in one-time funding.) The bill would also make it easier for state program operators to adopt innovative approaches like those proposed in the pilot projects above, by doubling the maximum allowable cost per project and loosening restrictions on spending on renewable energy systems.
Other Changes Lie Within Energy Department’s Control
Other needed program changes are well within the Energy Department’s authority to enact by regulation. For example, the Department largely has control over the cost-effectiveness test used in the program. Currently, estimated savings must exceed costs at the individual measure level—an incredibly restrictive test that limits the number and type of weatherization measures that can be installed. Advocates have called for a more permissive test that would allow the Department to consider cost effectiveness at a building-wide or sub-portfolio level and include the considerable non-energy benefits of weatherization, such as health and safety and environmental benefits.
The Department can also support states to better address climate and equity issues in their weatherization programs by issuing guidance and providing technical support. Despite the importance of weatherization to enabling electrification of fossil-fueled homes, the Department has yet to issue any program-wide guidance on the use of weatherization funds to support electrification-readiness (or direct electrification).
WAP can and should be a centerpiece of the Biden Administration’s building decarbonization strategy. The Biden Administration can promote an equitable climate transition by providing robust funding for the program, by passing the Weatherization Enhancement & Readiness Act, and by encouraging the Department of Energy to update its program rules and issue guidance to support climate-aligned weatherization.
This blog provides general information, not legal advice. If you need legal help, please consult a lawyer in your state.
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