Stimulus plan targets energy efficiency, sustainable projects and infrastructure

Feb. 20, 2009
Economic stimulus plan includes job and long-term growth in a variety of industries, including energy, and the infrastructure.

WASHINGTON — President Barack Obama signed the American Recovery and Reinvestment Act of 2009, a policy created to jump-start the distressed U.S. economy, Feb. 17. The policy is designed to save or create more than 3 million jobs and focus on long term economic growth by investing in a variety of industries, including energy, and the infrastructure. Tax cuts for purchasing and installing energy efficient products are also included in the economic stimulus plan.

Before taking office, Obama spoke about his American Recovery and Reinvestment Plan, touching upon the importance of an energy economy.

“We will modernize more than 75% of federal buildings and improve the energy efficiency of two million American homes, saving consumers and taxpayers billions on our energy bills,” said Obama. "In the process, we will put Americans to work in new jobs that pay well and can’t be outsourced – jobs building solar panels and wind turbines … and buildings; and developing the new energy technologies that will lead to even more jobs, more savings, and a cleaner, safer planet in the bargain."

The stimulus plan was presented to Congress after Obama was sworn into office Jan. 20. Both Senate and House approved the $787 billion stimulus package, Feb. 13.

According to the U.S. Congress, the following projects and research will be funded through The American Recovery and Reinvestment Act of 2009: facility sustainment, restoration and modernization projects using energy efficient products, $4.2 billion; improve energy efficiency in aging public housing, $4 billion; energy retrofitting and investing in green projects in HUD-assisted housing, $250 million; increase energy efficiency using green technology in federal buildings, $4.5 billion; energy efficiency and conservation grants, $6.3 billion; energy efficiency and renewable energy research, $2.5 billion; new loan guarantees for renewable projects, including wind or solar projects and electricity transmission projects, $6 billion.

Because of the investment in infrastructure and energy, heating and cooling systems will be upgraded in government buildings and schools, creating construction projects. States will receive $9.75 billion to modernize and renovate schools' heating and cooling systems.

The Associated General Contractors of America concluded in its analysis of the stimulus plan that the investments in construction and infrastructure will create or save nearly 2 million jobs over the next two years.

“There is no doubt the stimulus will have a positive impact for construction businesses and their workers across the country,” said Stephen Sandherr, CEO of the Associated General Contractors of America. “When you get beyond the politics and the policy, the fact remains these investments will put people to work, save businesses and help rebuild aging infrastructure.”

Ken Simonson, economist for the Associated General Contractors of America, noted that the $135 billion for construction would increase personal earnings nationwide by $75 billion and add $230 billion to the GDP.

“Whether or not you wear a hard hat for a living, these construction investments will make a difference for the better,” said Simonson. “Beyond the immediate benefits, the new infrastructure projects will make business more efficient, commuting more reliable and our economy more prosperous for years to come.”

The ARRA also benefits consumers through tax breaks for purchasing and installing certain sustainable products, giving them an incentive to make their homes energy efficient.

Homeowners will receive a 30% tax credit (a $1,500 limit) for the installation of qualified energy efficient water heaters, furnaces, boilers, air source heat pumps and central air conditioners in 2009 and 2010. Ninety-five percent AFUE gas furnaces; 90% AFUE oil and gas furnaces and gas, propane, or oil-fired boilers; 16 SEER/13 EER and greater central air conditioners; 15 SEER/12.5 EER/8.5 HSPF split heat pumps; and 0.82 energy factor/90% thermal efficiency gas, propane, or oil water heaters will qualify for this tax credit. Homeowners will also receive a 30% tax credit on installation costs of residential wind, and geothermal and residential solar thermal property.

"This bill provides enhanced incentives for consumers to upgrade existing heating and cooling equipment and it provides funding for the federal government, states, and cities to improve energy efficiency in buildings and schools," said Stephen Yurek, president of the Air-Conditioning, Heating and Refrigeration Institute. "We are thrilled that there appears to be a paradigm shift in how policymakers view our industry. They now rightly see us as the solution providers we are and they have provided the market stimulus to help us provide those energy saving solutions for the good of the nation."

Since the stimulus package invests in energy efficiency, ANSI/ASHRAE/IESNA Standard 90.1-2007, the minimum energy standard requirement for buildings except low-rise residential buildings, is recognized in the plan through state funding measures.

Governors will be required to work towards implementing and meeting building energy codes in Standard 90.1-2007 to receive additional funding from the $16.8 billion allotted to the Department of Energy and Office of Energy Efficiency and Renewable Energy. States must also develop a plan to achieve 90% compliance with the code, including provisions for training and enforcement programs.

“For more than 30 years, Standard 90.1 has been one of the building industry’s most important benchmarks for energy efficiency,” commented Bill Harrison, president of the American Society of Heating, Refrigerating and Air-Conditioning Engineers. “Its inclusion in the economic stimulus package demonstrates not only its importance in the building industry, but the importance and economic potential of saving energy and promoting energy-efficient technologies.”

Other investments in ARRA 2009 include alternative fuel trucks and buses, transportation infrastructure and energy efficient appliance programs; drinking water and wastewater projects; restoration and improvement of public facilities on public and tribal lands; transportation projects, including highway, public transportation and air and rail transportation improvements; and environmental clean-up projects, including Superfund, among others.

The final text of the legislation is available at:

About the Author

Candace Roulo

Candace Roulo, senior editor of CONTRACTOR and graduate of Michigan State University’s College of Communication Arts & Sciences, has 15 years of industry experience in the media and construction industries. She covers a variety of mechanical contracting topics, from sustainable construction practices and policy issues affecting contractors to continuing education for industry professionals and the best business practices that contractors can implement to run successful businesses.      

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