'Weatherization' Seen Saving Jobs as Well as Energy

Brain A. Shactman, Molly Mazilu|CNBC Reporter, Producer
Stimulus Scorecard

The Recovery Act has about $5 billion set aside for what's called weatherization—except almost no one knows what "weatherization" means.

So we went out to find out and to see if the program is doing what taxpayers expect the $787 billion stimulus package to do: create jobs.

Let's start with the concept:

Weatherization is a top-to-bottom effort to make homes more energy efficient, especially for people on the lower end of the income spectrum. The work ranges from insulation, siding and roofing all the way to cleaning a boiler and installing energy-efficient lighting and appliances.

"There's going to be a tremendous amount of weatherization work done over the next couple of years," Deborah VanAmerongen of the New York State Division of Housing and Community Renewal. "We want everyone who is eligible to participate."

Weatherize & Save Big Bucks

VanAmerongen conservatively estimates that, in New York state alone, 50,000 homes will get weatherized because of the Recovery Act.

In terms of trickle down, the federal funds goes to a state agency, which then allocates money to an array of local non-profit agencies, which then farm out the work to local contractors. The average amount spent on each home is $6,500.

Out of all 50 states, New York is receiving the most money—nearly $400 million.

Texas, Pennsylvania, Michigan and Illinois are all going to receive more than $240 million. Nationally, the Department of Energy expects to update one million homes a year, beginning in 2010.

For perspective, the federal budget for this kind of work would have been about $250 million for the coming year, and now, it's in the billions.

"It really is a triple benefit," Deborah VanAmerongen. "It is absolutely job creation which was of course was a primary focus of the stimulus package. It also is about greening our economy and creating green-collar jobs, which has been a big focus of ours here in New York state, and long term its been about the energy efficiency of the households."

That brings us to the first benefit: jobs.

VanAmerongen says that, by the end of the two-year period, a "couple of thousand" jobs will be created all across New York state.

"We have had such a decline in construction industry in general throughout New York State," VanAmerongen says. "It's a great opportunity for some of those contractors who might not have been working."

Beyond direct job creation, energy efficiency and saving people money on monthly bills, there should also be an impact in the broader economy.

In terms of publicly traded companies, the local contractors do what we all would do: They go to gigantic retailers like Sears and Home Depot .

CNBC also spoke to Owens Corning , the global insulation producer. The company says it is monitoring the weatherization closely—and even has staff dedicated to the effort—but has not yet seen a demonstrable uptick in sales.

Like so many elements of the Recovery Act, most of the money will be spent in 2010, so the real impact cannot be judged right now as so many Americans want to be the reality. In 12 months, we could have a whole lot more energy efficiency in American homes, and we could know a whole lot more as to whether it's helped the labor market recover.

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