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Obama Unveils Details of Energy Efficiency Incentive Program

Homeowners could receive rebates up to $3,000 through Homestar, a new federal program that offers incentives to make homes more energy efficient, President Obama said last Tuesday.

The program, which is part of a $6 billion proposal included in jobs legislation working its way through Congress, would make the economy less dependent on fossil fuels, create work for small businesses and contractors, and bring back construction jobs, Obama said in a speech in Georgia. Unemployment in the construction sector is near 25%.

"Here's one of the best things about energy efficiency -- it turns out that energy-efficient windows or insulation, those things are products that are almost exclusively manufactured right here in the United States of America. It's very hard to ship windows from China, so a lot of these materials are made right here in America," Obama said.

The Homestar program would include 50% rebates up to $1,500 for energy-efficiency upgrades including insulation, duct sealing, water heaters, heating and air conditioning units, windows, roofing and doors. Rebates up to $3,000 would be available for comprehensive retrofits. Consumers would be eligible for direct rebates at the point of sale, similar to the Cash for Clunkers program.

Manufacturers were encouraged by Obama's comments, according to Dorothy Coleman, National Association of Manufacturers vice president, tax & domestic economic policy.

"We believe this is a step in the right direction. At the same time, we think there is room for improving the proposal in ways that would result in the creation of even more manufacturing, construction and retail jobs," Coleman said.

In his State of the Union address in January, Obama called on Congress to pass a jobs bill with an energy component, including a program of incentives for homeowners who make energy efficiency investments in their homes (see NGI, Feb. 1). New jobs in alternative energy, oil and natural gas, nuclear, biofuels and clean coal technologies should be a critical component of a jobs bill, Obama said.

Obama first called on Congress in December to provide incentives for consumers who retrofit their homes to become more energy efficient (see NGI, Dec. 14, 2009). He also proposed an expansion of "select" initiatives in the American Reinvestment and Recovery Act to promote energy efficiency and clean energy jobs that have been proven "to be particularly popular and effective."

Rep. Peter Welch (D-VT) last spring wrote similar energy efficiency legislation, Retrofit for Energy and Environmental Performance (REEP). Welch's legislation became part of the American Clean Energy and Security Act, also known as the Waxman-Markey climate change energy bill. Welch subsequently organized a group of 44 House members who urged the president to include a version of REEP in a jobs creation program.

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