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What’s the Weatherization Assistance Program?
The U.S. Department of Energy (DoE) created the Weatherization Assistance Program (WAP) in 1976 to enable low-income families to permanently reduce their energy bills by making their homes more energy efficient. Through WAP, weatherization (Wx is how industry insiders abbreviate it) service providers receive funding from their states to install energy-efficiency measures in the homes of qualifying homeowners free of charge.
The average expenditure limit is $6,500 per home, and energy savings pay for the upgrades within a few years. More than 6.2 million low-income families have benefitted from WAP.
Learn more about WAP here.
How does the money flow?
DOE provides funding and technical guidance to a designated agency in each state. The states run their own programs and set rules for issues such as eligibility. The states then subcontract the work to local service providers, which are usually nonprofit agencies. These agencies either perform the Wx services themselves or hire private contractors to do the work.
More than 900 of these agencies nationwide constitute what is known as the “Weatherization Network.”
These agencies take applications from families in their service area, determine which families are eligible (based on income level) and most in need, perform an energy audit of each home, determine cost-effective Wx measures for each home, install (or contract out for the installation of) energy-efficiency measures, and inspect all work.
What does weatherization mean, anyway?
Wx essentially means shoring up a building to make it more comfortable, more energy-efficient, and more safe. Wx includes a wide variety of energy efficiency measures that encompass the building envelope, its heating and cooling systems, its electrical system, and electricity consuming appliances.
“The work we do to homes consists of testing the home, changing windows and doors, insulating, new VAC, roofing, and building-enclosure repairs,” says Marc French, a former general contractor and now senior auditor/inspector with a weatherization agency in Idaho called CCOA. His agency weatherizes 60 homes a month through WAP.
As excerpted from Wikipedia, some types of typical Wx work include:
Sealing bypasses (cracks, gaps, holes), especially around doors, windows, pipes, and wiring that penetrate the ceiling and floor, and other areas with high potential for heat loss, using caulk, foam sealant, weather-stripping, window film, door sweeps, electrical receptacle gaskets, and so on to reduce infiltration.
Sealing recessed lighting fixtures ('can lights' or 'high-hats'), which leak large amounts of air into unconditioned attic space.
Sealing air ducts.
Providing proper ventilation to unconditioned spaces to protect a building from the effects of condensation.
Installing roofing, building wrap, siding, flashing, skylights or solar tubes and making sure they are in good condition on an existing building.
Installing insulation in walls, floors, and ceilings, around ducts and pipes, around water heaters, and near the foundation and sill.
Technically, Wx also encompasses replacing windows and doors, and adding storm doors. But “DoE doesn’t like changing windows, or rather they have very strict rules about doing such work,” says French. “We purchase 100 windows, 20 doors, and 15 HVAC systems a week here,” he says, on top of huge quantities of caulks, sealants, and insulators.
Why is WAP news now?
Because the 2009 American Recovery and Reinvestment Act (ARRA, sometimes referred to as the Recovery Act and/or “economic stimulus plan”) provided more than $5 billion in additional funding to expand WAP around the country.
As explained by Steven Chu, secretary of the U.S. Department of Energy, and Hilda Solis, secretary of the U.S. Department of Labor, “The funding will help states achieve their goal of weatherizing hundreds of thousands of homes, lowering energy costs for low-income families that need it, reducing greenhouse gas emissions, making low-income homes healthier and more livable, and creating jobs across the country.”
How much money did my state get?
Depends on your state. You’ll find a state-by-state WAP Recovery Act allocation breakdown here.
We can tell you that the top seven states, in terms of Wx funds allocated, are: New York ($395 million), Texas ($327 million), Ohio ($267 million), Pennsylvania ($253 million), Michigan ($243 million), Illinois ($243 million), and California ($186 million). Hawaii, with just over $4 million, has received the least.
But you can still do a lot of weatherizing with $4 million. Especially in Hawaii.
Wonderful. But I work in residential remodeling. We do market-rate work for paying clients. Why should we be interested in WAP?
Truthfully, you might not want to be. The jobs are small; your client is the state agency, not the actual homeowners; the homeowners may be unlikely to become repeat clients (at least on the types of work that you prefer to do); Wx work tends to be dirty and unglamorous; and WAP work requires complying with state and federal guidelines
“We are staying out of WAP for very simple reasons,” says Matt Golden, CEO of San Francisco-based Sustainable Spaces, one of the largest home energy retrofitting companies in the U.S. “We are focused on developing a scalable model for the middle market, and WAP is simply a different market. We strive for quality and happy customers, but when you work in WAP, the way you make money is to provide minimum services at the lowest cost.”
On the other hand, if business is slow for you and/or you’re interested in positioning your company for market-rate home-energy retrofitting work in the years ahead, WAP creates jobs, pays like clockwork, and sells itself, job after job after job.
“We know anecdotally that many, many more home remodelers/homebuilders have expressed interest in becoming weatherization program contractors than ever before,” says Eli Nesson, of Economic Opportunity Studies, a D.C.-based nonprofit. “Many local agencies are finding firms that turned down opportunities to bid in the past are showing up to get involved.”
“I know many contractors who are making a great living from WAP funds,” French says. “In fact, they are too busy and can’t keep up! We are scrambling to add contractors by our rolls as we speak.” Contractors that do WAP work well, he says, “do it by being part of the system, by working within its boundaries, and by not trying to rewrite a system that’s been around” for many years.
He doesn’t recommend WAP as a dalliance. “Don’t plan on doing one or two jobs and getting out; it won’t pay off that way, as the bids are too low,” he says. “If you’re serious, be ready to commit a large part of your resources to Wx work. Once you’re in our system, we are liable to consume lots, if not all, of your time!”
Liberty Homes, in the Kansas City area, is a WAP contractor in Missouri. “It’s absolutely a good place to go” for remodelers and builders who want to stay busy now as well as ramp up for an expected increase in middle-market weatherization opportunities, says Rick Westmoreland, owner. “We’re in a new economy, and 130 million homes across the country need weatherization.”
Westmoreland’s company used to build “a few hundred homes a year,” he says. With the new home market in the tank, and with previous experience doing WAP work in the 1980s, he has re-established Liberty Homes as a small but fast-growing Wx business.
Between mid-August and last week, Liberty Homes had received 37 contracts for WAP jobs averaging $2,500-$3,000 apiece. “I’m banking on it,” he says of WAP work through the Recovery Act, whose WAP funding currently extends through 2010. “Personally, don't think there's any other way out of the recession.”
What are some of the “boundaries” of WAP work? How much do I have to pay my people?
Your state will dictate what those boundaries are, as well as the training and bonding and other requirements of doing WAP work. In general “be ready for lots of oversight and post-work inspections,” says French. “Pay can be 30 days out, but it is a rock-solid investment, and after a few months, the checks will start rolling in.”
That’s been Westmoreland’s experience. He submits bids for WAP jobs each week, “and we get the answer the next morning.” Within 10 days, the work begins (and typically finishes in a day). It is then inspected, “and within 10 days we get a direct deposit” of payment, he says.
As for paying Wx workers, WAP contractors are obligated to pay the “prevailing wages” mandated in a 1931 federal contracting law called the Davis-Bacon Act. For months – and to this day, in some regard – there was great confusion because the Department of Labor had never established prevailing wages for weatherization work.
In the months since ARRA’s passage, almost all the states have hammered out their prevailing wages for WAP work, and they tend to be right in line with, or even lower than, market-rate wages. “The new weatherization classifications are a lot more palatable than the previous wage rates, which were based almost entirely on commercial,” says Golden.
In Missouri, “we thought it would be $56 an hour, with benefits,” Westmoreland says. Now those wages are closer to $11.
Here’s a link to all (or at least most) states’ Wx prevailing wages for weatherization work.
How do I get started?
“Go online and find your state energy office,” says Westmoreland. This page on the DoE website links to all state offices.
Familiarize yourself with your state’s programs, and plan to invest in training and perhaps some equipment. To identify Wx training centers in your area, click here.
“This is a long-term, sustainable opportunity,” Westmoreland says. “If a remodeler knows how to sell home improvements, knows how to reach customers, knows how to give good service, you can seamlessly do this kind of work.
Want more information about weatherization and home-energy building performance?
Building Performance Institute www.bpi.org
Affordable Comfort Institute http://www.affordablecomfort.org/
Home Energy Magazine http://www.homeenergy.org/
Energy Circle www.energycircle.com
Efficiency First http://www.efficiencyfirst.org/about/
