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It's Time For A WAP Stimulus

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Energy efficiency has been among the worst hit industries in the pandemic’s economic carnage. The sector, which accounted for the maximum number of jobs in clean energy pre-recession, has ground to a halt after Covid-19 struck, leading to significant job losses. But there is an opportunity in every disruption. And so this might be the perfect time to pump stimulus money into and rethink our existing approach to energy efficiency programs. 

To that end, diverting stimulus money towards the Weatherization Assistance Program (WAP), that benefits low-income citizens, might be a good move given the current wave of protests demanding racial and economic justice protests galvanizing the nation’s imagination. Typically WAP’s budgetary disbursements are between $250 million to $300 million. But that might change. Along with forty three of their colleagues, Representatives Donald McEachin (D-Va) and Raul Grijalva (D-Ariz.) wrote a letter in March asking Congress to set aside $7 billion stimulus money for WAP to “strengthen the program to better reach low-income families.” 

Why WAP Stimulus Money Is A Good Idea 

There are three benefits to increasing the federal funding outlay for WAP. 

First, it will create new and much-needed jobs to revive the industry from its currently moribund state of affairs. Those job gains could be substantial. According to research by Texas-based energy advisory firm Rhodium Group, the economy could gain as many as 17,000 direct and induced jobs (or employment that is created as a result of direct jobs) as a result of the proposed stimulus money for WAP.  That’s double the current WAP employment figure of 8,500. 

Second, the stimulus money could help devise ways to make the program more efficient. The government estimates that approximately 20 million to 30 million homes are eligible for WAP. Since it was introduced more than forty years ago, the program has weatherized an average of 35,000 low-income homes per year. Cumulatively, that amounts to less than two million homes during its lifetime. Despite the program’s extensively documented benefits, enrollment remains low due to a variety of reasons, from lack of awareness to confusing eligibility criteria. 

Currently utilities provide money to plug the funding gap between federal money and local initiatives. An example is Vermont's Burlington Electric Department. The municipal-owned utility is boosting funding for weatherization projects for renters and homeowners, who are not eligible for WAP federal funds, through its Green Stimulus. At a time when electric utilities are facing the prospect of an avalanche of unpaid electric bills, an added expense of weatherization programs will weigh heavily on their balance sheet. WAP stimulus funding will ensure a green recovery from the current recession, correct the program's inefficiencies, and, possibly, broaden its reach.  

 Finally, as I mentioned earlier, increased funding for programs, such as WAP, could help change the conversation around clean energy and make it an issue across the board. Even as I write this piece, New York is undergoing its first heat wave this year. Temperatures today are expected to hit the late 90s but will feel like they are above 100 degrees. Heat strokes are common in such weather. What’s more, 2020 is on course to become the one of the hottest years on record and heat domes, in which atmospheric air swoops down into big cities to make them hotter, will become more common. Low-income people and communities of color are disproportionately impacted by such heat waves. Upgrading their cooling equipment to make it more energy efficient and affordable, as far as electric bills are concerned, will result in better health and energy outcomes.   

This is not uncharted territory, We already have previous stimulus experience with WAP. During the 2008 recession, the Obama administration provided $5 billion in WAP stimulus funding through the American Recovery and Reinvestment Act (ARRA). That infusion led to a slew of benefits: it created 28,000 jobs and saved households an average of $3,190 in electric bills. More importantly, it reduced carbon dioxide emissions by 7.3 million metric tons.

Rakesh  Sharma's picture

Thank Rakesh for the Post!

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