Although it contains almost no money for building green homes, the $787 billion economic stimulus bill that President Obama signed in February is expected to create jobs for insulation contractors, window installers, and other pros whose work involves making existing homes more energy efficient. Two provisions that offer tax credits to homeowners for energy-efficient upgrades and pay to weatherize the houses of low-income families could spur an estimated $6 billion of activity in the remodeling industry, according to congressional estimates.

In a statement, the chairman of NAHB Remodelers praised Obama’s focus on remodeling and retrofitting. “Even the most aggressive efficiency goals for new homes won’t make a dent in overall energy consumption,” said Greg Miedema, a Tucson, Ariz., remodeler. “Instead, remodeling and retrofitting the nation’s older homes is by far the more efficient solution.”

Tax Credits & Rebates

The American Recovery and Reinvestment Act of 2009 reinstated an expired IRS tax credit for improving energy efficiency in existing homes. The tax credits cover 30% of the purchase price of new high-efficiency water heaters, windows, and air conditioners, and for adding insulation, up to a $1,500 total per household. To qualify, an item must be 15% to 20% more efficient than the standard model.

In addition, the package includes funds that states can use to sponsor utility rebates for the purchase of energy-efficient appliances (also 15% to 20% more efficient than standard) and for tax credits for installing solar panels and solar hot water heaters.


The stimulus package includes $5 billion that is expected to help 1 million low-income families reduce their energy costs by weatherizing their homes.

Last year, the DOE allocated $227.2 million for its 33-year-old Weatherization Assistance Program, which benefited 100,000 households in 2008. The money paid to upgrade low-income homes with thicker insulation, more efficient heating and cooling systems, better air filters, and weather-resistant windows.

The stimulus law raises the amount that can be spent per house from $3,055 to $5,000. To qualify for the program, a family of four can earn no more than $32,000 per year.

One of the priorities of Obama’s plan, weatherization has been proven to reap a tidy return on investment. A well-weatherized home, the DOE says, can save a family up to $413 on its annual energy bills. That’s a significant savings for a low-income household, which spends about 17% of its annual income on energy, compared with just 4% for higher-income households that are more likely to have better insulation and windows, estimates the federally funded Oak Ridge National Laboratory.


It’s possible builders and remodelers will benefit from the law’s $500 million for training workers for careers in energy efficiency and renewable energy, although such training programs typically are reserved for union members. Few residential builders and remodelers belong to unions. —Sharon O’Malley

For additional details, check out the Alliance to Save Energy’s summary at

Learn more about markets featured in this article: Tucson, AZ.