Special District Might Fund Energy Program

Most homeowners would say that they’d love to save a few dollars on heating their houses. And caulk is cheap, right? So why would a homeowner who feels a draft hesitate to invest in a caulking gun and a tube of caulk? One possible reason: To do a really good, comprehensive job sealing up a whole house could require a $3,000 investment – in labor, caulk, spray foam, weatherstripping, and other materials.

So if  homeowners are going to spend a few thousand dollars to improve the energy efficiency of their houses, maybe there’s a more cost-effective investment they could make – like throwing $2,000 worth of extra insulation in the attic.

The city of Ann Arbor has a similar challenge – if it receives more than $1 million in federal stimulus funding from the U.S. Department of Energy to invest locally. Andrew Brix, energy coordinator for the city, and other city staff need to answer the question: How do you spend that money in the most cost-effective way for the community?

Their tentative answer could include financial help for homeowners in the form of loans set up through a self-assessment energy financing district – help for homeowners like the one faced with the $2,000-for-air-sealing versus $3,000-for-attic insulation question.

The Chronicle didn’t pull those numbers out of a hat. We pulled them out of a Matt – as in Matt Naud’s energy audit report. Naud is the environmental coordinator for the city of Ann Arbor, and he agreed to let us shadow the Recycle Ann Arbor energy audit team as they conducted their analysis of his house.

When The Chronicle arrived last Tuesday morning at Naud’s house in the Lakewood neighborhood of Ann Arbor – just south of Jackson Road near Weber’s Inn – he was already sitting at the kitchen table getting quizzed by Eric Bruski and Jennifer Eschelbach. They work for Recycle Ann Arbor conducting energy audits for homeowners. The RAA energy audit program was recently expanded from a grant-funded program – one that covers 100 homes – to a fee-for-service arrangement.

Under the program, homeowners can get an onsite analysis of their energy use for $399, with as much as $200 of that recoverable through DTE rebates.

Among Bruski’s questions posed at Naud’s kitchen table: How many cycles does the household run the dishwasher daily? How many loads of clothes get laundered per week? Are there opportunities for line-drying of clothes? How many computers and TVs are there in the house and how often are they used? Is there any special-use equipment like power tools and space heaters?

As one might expect, for $200 after rebates, the audit is more than just a questions administered at the kitchen table. There’s gadgets and gear. There’s air pressure to measure. There’s infrared thermal scans to make.

The Energy Audit: Blower Door

So after the questions, Bruski broke out the door blower test kit and the infrared camera.

The door blower test set up consists of wedging a fitted fabric frame into a outside doorway – there’s a hole in the fabric to accommodate a fan that sucks air from inside the house and vents it to the outside. The test is conducted with all other windows and doors closed.

If the house were a perfectly sealed container, and the fan and blower door frame fabric were infinitely strong, once the fan is turned on, the air inside the house would be emptied out and the inside pressure would drop to zero. Of course, even a really well-constructed house isn’t perfectly sealed – some air will leak in through cracks and crevices.

So the pressure inside the house won’t drop to zero when the fan is turned on. But it will drop below the outside air pressure. In an industry-standard blower door test, the fan rate is adjusted to achieve a pressure difference of 50 pascals.

With an air flow rate derived from the fan speed, and a known pressure difference of 50 pascals, it’s possible to calculate the cumulative size of all the little holes through which the outside air is infiltrating the house. Knowing how much air is infiltrating naturally is key to deciding whether or not it’s worth trying to seal up some of the leaks.

During a blower door test, then, the house is sucking air in from the outside through various leaks at a much greater rate than during normal circumstances.

The blower door test makes drafts easier to feel – and if it’s a chilly day like it was last week, it makes the colder air easy to see as well, as long as you’ve got an infrared camera. [If you don't have an infrared camera, but you've got some exposed black film and an ordinary digital camera, you might consider: DIY infrared camera.]

The Energy Audit: Infrared Images

Once the blower door test was started, Bruski fired up his infrared camera. His hand-held unit displayed the images in black and white, which are later converted to color images.

After first demonstrating that the unit could pick up his thermal hand print from the wall, he began working his way through the house. In some cases, he was able to confirm for Naud, the homeowner, what he already suspected: The recessed lighting cans were a source of heat loss. They’re not well-insulated or sealed.

The camera also pointed towards a temporary window installation that was actually leaking quite a bit of air around the edges – despite the fact that it’d been installed with prodigious amounts of silicone caulk, Naud reported. Feeling by hand confirmed: there was cold coming from somewhere.

The Chronicle had to leave before the auditors headed for the attic. But Naud forwarded us the report he received from Recycle Ann Arbor.

The Energy Audit: The Report

From the audit report, here’s the set of possible measures for the homeowner to take, with those that are recommended indicated with an asterisk (*). The estimated payback is measured in years.

Energy Conservation          Est.       Est. Ann.   Est.
Measure                      Cost       Save        Payback

**Line dry clothes during    $     0    $ 17.50      N/A
the summer months 

Comprehensive air sealing    $ 3,200    $ 66.55      48.08
package to reduce the air
infiltration rate in your
house from 3900 to 3240
cubic feet per minute at
50 pascals of pressure.

Install ENERGY STAR          $25,000    $185.29     134.92
qualified windows
throughout house 

Install Serious Materials    $35,000    $465.52      75.18
(.09 U factor) windows,
or equivalent, throughout
house 

**Increase insulation in     $ 2,200    $120.83      18.21
ceiling from R-19 to R-49 

**Upgrade 4 showerheads from $   240    $ 40.00       6.00
2.5 gallons  per minute to
2.0 gallons per minute or
less 

**Install 7 faucet aerators  $    35    $ 16.48       2.12
to reduce flows from 2.0/2.2
gallons per minute to 1.0
gallons per minute or less 

**Insulate the first 4 feet  $    10    $  2.06       4.85
of the hot water outlet and
cold water inlet lines with
foam pipe insulation 

**Replace 38 incandescent    $   239    $131.00       1.82
lamps with compact
fluorescent bulbs where
possible 

Upgrade to 16SEER AC Units   $ 5,000     $80.57      62.06 

**Totals                     $ 2,724    $327.87       8.31

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So what about that $3,000 air sealing package and the $2,000 worth of attic insulation that we were wondering about? In the report, the air sealing package isn’t recommended as a priority, but the attic insulation is. But it’s not because $2,000 is less than $3,000. It’s because the payback on the air sealing package is almost 50 years, compared to the roughly 20-year payback for the extra attic insulation.

How to Pay for Home Energy Improvements

Andrew Brix, energy coordinator for the city of Ann Arbor, sketched out two basic schools of thought in approaching energy improvements: (i) keep it simple, and (ii) be comprehensive. Being comprehensive can be an expensive proposition, as the energy audit report shows.

So Brix told us about a program the city has applied for through the U.S. Department of Energy: the Energy Efficiency and Conservation Block Grant (EECBG). The $1.2 million the city has applied for would be divided among a few different projects: (i) Phase II of the LED streetlight replacement, which would replace all streetlights outside of downtown with LED lights, (ii) some small renewable energy demonstration sites for photovoltaic panels, solar hot water, and windmills, and (iii) a community program to assist homeowners in making energy improvements.

That third component would take about $760,000 of the grant. Here’s a sketch of how it might work:

1. A home or business owner pays for an energy audit similar to the one that Naud had done – it wouldn’t have to be done by Recycle Ann Arbor. Several businesses provide that service, too.
2. The audit provides a list of recommended improvements.
3. The city provides a list of qualified contractors.
4. The city sells bonds to lend the home or business owner the money to cover the cost of the audit plus the improvements.
5. The energy improvements are done.

As No. 4 on that list makes clear, the Department of Energy grant wouldn’t pay directly for energy improvements.  Instead, the grant money would pay to support a program to lend the money for those improvements.

That lending program would depend on the creation of a self-assessment energy financing district – a notion that doesn’t yet exist in the state of Michigan. In some other states, however, such mechanisms already exist to allow local governments to issue bonds to fund energy projects – for example, in California (Berkeley and Palm Desert), Colorado (Boulder County) and New York (Babylon).

How exactly would the financing work? The money that’s lent through the issuance of the bonds would be repaid over a period of time through a special tax or “assessment” on the property tax bill of just those property owners who’d been lent money for the energy improvements. Because it’s a tax, the collection mechanism is already built into the system. In case of foreclosure, it would be paid along with other taxes before other claims on the property.

In addition to the built-in enforcement mechanism of the tax collection system, there would be a “securitization  pool” as a backstop to give the purchaser of the bonds additional confidence –  around $400,000 of the grant to Ann Arbor would be used for the securitization pool.

The remaining $260,000 from the grant would fund two years to staff the program – one full-time employee, plus an intern. Once it’s up and running, the goal would be to build in administrative costs to help build a fund to sustain those positions.

But if the concept of a self-assessment energy financing district doesn’t exist in Michigan, why even bother to contemplate it as a possible use for an energy grant? Even though it doesn’t exist now, it could be introduced soon, although the timetable is uncertain. The Chronicle confirmed with the office of state Rep. Rebekah Warren (53rd District) that she is currently working on legislation to enable the creation of such energy districts in Michigan.