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North Bay Business Journal

Monday, December 14, 2009, 10:51 am

Study: Energy program could be jobs booster

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    SONOMA COUNTY – A Sonoma County program allowing for energy-efficient upgrades to buildings has already begun to create much needed contracting jobs, and according to a recent outlook report could create thousands more.

    The Sonoma County Energy Independence Program is a financing vehicle for energy-efficiency improvements like insulation, windows, solar and more.

    Dr. Rob Eyler, the chair of the economics department at Sonoma State University and the director of the Center for Regional Economic Analysis, developed an employment and economic impact analysis and estimation for SCEIP.

    “I was asked to put together a report essentially about how many jobs could be created by so much spending on this program,” Dr. Eyler said.

    The program was made possible because of Assembly Bill 811, which allows cities and counties in California to create financing districts for energy improvements.

    The program launched by Sonoma County started in March of this year. Property owners can get a loan for specific energy improvements, such as windows, solar, HVAC and insulation, and pay back the loan on their property-tax bill.

     “These types of programs are classic economic development tactics,” Dr. Eyler said. “You have a quasi-government agency getting involved in creating jobs, reducing environmental imbalances and creating tax for social use.”

    Dr. Eyler said the construction spending in Sonoma County in 2009 showed an average of $364,363 in spending generates one full-time equivalent job in construction.

    He estimates that if SCEIP reached $1 billion in cumulative spending by September of 2012, 11,270 new jobs would be created; if the program reached $500 million, 5,635 would be created; if $100 million, there would be 1,127 new jobs.

    For this estimation, about 75 percent of the jobs would be in construction services, both residential and non-residential.

    As far as how much the program has done for contractors so far, it is still a little early to say now, according to Dr. Eyler.

    “The magnitude of spending is still relatively low,” he said.

    So far, the program has contracted out more than $18 million in jobs. As of Dec. 4, more than $13 million in projects have been funded.

    SCEIP put out its own report suggesting that the 8.4 percent growth in construction jobs in Sonoma County following the rollout of the program is in line with the program activity.

    Cary Buxton, an estimator with Second Generation Roofing, said it absolutely seems like SCEIP is generating business.

    “Everybody and their uncle is into it now,” he said. “There are a lot of slow contractors out there. There are a lot of people chasing that money.”

    He said in many cases it is more about maintenance than just energy improvements.

    “From the roofs I have done, it is more about people being able to afford a new roof than about saving energy.”

    Greg Kramer, the sales manager for Jack Smith Glass and Sash, said of the five jobs it has done through SCEIP, none of them would have been done if the program was not around.

    “We have seen renewed interest in that segment of our business,” he said.

    Some contractors, meanwhile, are hoping for a smoother payment system from the program.

    As currently structured, all contracts and paperwork have to be in by the 25th of the month and then SCEIP pays out in the first week of the following month.

    “The best case scenario is you will get paid within a week,” said Mr. Kramer. But if contracts are not put together in time or if there are multiple jobs on a loan, there can be weeks of waiting.

    Mr. Buxton, for instance, said he has to wait an extra month to get paid on a job.

    SCEIP said it is trying to address the issue.

     “We have been trying to set up an escrow account where we would dump a bunch of money into it and pay out as contracts are completed,” said Amy Bolten, public information officer at the Sonoma County Water Agency, which helped found the program.

    Mr. Kramer said he gets around the issue by requiring the customer to make a deposit.

    “We still require a deposit,” said Mr. Kramer. “We have a contract with the customer. That is a separate deal than the loan. They pay us and deal with the reimbursement.”

    Or like David Willson from Advanced Home Performance, some just wait for the reimbursement.

    “Some people can afford it up front, some can’t,” he said. “I just love the program so much I am happy to wait on the payments.”

    On a whole, contractors seem to be seeing an uptick in business that they are relating directly to the program.

     “I think that especially now with AB 32 people will look to make the improvements, and this is a good program for that,” Dr. Eyler said.

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