“Cash for Caulkers”—The Construction Industry’s Version of Cash for Clunkers?

By Jared M. Scarbrough


You’ve likely heard of “Cash for Clunkers”—a federal government program where a potential purchaser of certain new cars at participating dealerships could trade in an older car for an unusually-high trade-in rebate—but have you heard of “Cash for Caulkers”? Cash for Caulkers is President Obama’s proposal that calls for greater incentives—perhaps amounting to thousands of dollars—for homeowners to get new energy-efficient appliances, windows, and other such items.

The proposal will likely be patterned after New York State’s home energy efficiency program. Essentially, a homeowner seeking to take advantage of the program locates a participating contractor to schedule an energy audit—available on a designated website or by calling a toll-free number. Then, for about $500, the contractor will meet the homeowner at his or her residence and figure out how much energy the house wastes by placing a huge fan in the doorway that will suck outside air into the house, highlighting leaks in windows, doors, and walls. Among other things, the contractor will also test each appliance to see how much energy they use, and check the thickness of insulation and windows.

After the inspection, all of the information from the inspection is fed into a computer model that generates a checklist with everything that could be replaced, how much it will cost, and how much energy savings can be expected out of it. The homeowner decides how much work to do, and negotiates a price with the contractor. When the work is complete, the homeowner pays the contractor, and the contractor submits the paid invoice to the federal agency that runs the program. The homeowner then gets a reimbursement check from the agency of up to 50% of the project cost—with a maximum reimbursement of $12,000—usually within 30 days.

What does this mean for the construction industry? Well, for contractors hit hard by the recession and collapse in homebuilding, this program would be a godsend as it is expected to create over 250,000 construction jobs nationwide.

The proposal is currently in the early stages of development and there is no timetable for its implementation. But with the cost to the government a “mere” $10 billion, experts expect the proposal to be approved once the kinks are worked out and for the program to be initiated later this year.

For more information contact jscarbrough@holmwright.com/.