Across the country, state and local governments are awaiting a windfall investment from the federal government to modernize infrastructure and ensure energy security. Everything from housing to bridges, airports and the electric grid will receive an injection of funds to provide safer, more efficient, more equitable and more climate-aligned basic services to everyone living in the United States. In the housing sector alone, historic and new programs will be receiving billions of dollars instead of their usual millions. States

will receive between a threefold and thirtyfold increase in funds through the historic Weatherization Assistance Program (WAP) and millions of dollars from the State Energy Program and the Energy Efficiency and Conservation Block Grant Program. And in the coming years, states will have access to over $50 billion in federal funding to invest in energy projects for buildings thanks to the Inflation Reduction Act (IRA), with the potential to transform the building retrofit industry. How states use, leverage and stack these weatherization and energy security funds could have a monumental impact on housing infrastructure, families’ daily lives and our climate. This is an opportunity states cannot let slip by.

Compounding Burdens

Recent years have more glaringly exposed the compounding economic, health care and environmental burdens that are constantly knocking on the door of U.S. households:

  • Nearly 52% of low-income households reduced or forwent expenses for basic necessities, such as medicine or food, in order to pay an energy bill for at least one month in the last year.
  • Thirty-four million U.S. households reported facing energy insecurity at some point in 2020, with a disproportionate impact on low-income households, renters, Black and Hispanic households and households with children.
  • Some 34.6 million U.S. homes contain lead-based paint.
  • Over 700 million metric tons of climate pollution are emitted from the direct combustion of fossil fuels in U.S. homes every single year.
  • Children in homes with gas stoves have a 42% higher risk of experiencing asthma symptoms.
  • Lower-income populations and communities of color may be disproportionately impacted by risk factors such as a greater likelihood of living in an older home and increased exposure to air pollution, causing higher rates of asthma.

These combined drains on families require holistic solutions: We must act with more urgency and ambition to make housing healthier and more energy-efficient. A keystone tool to accomplish this is hiding in plain sight — evolved weatherization assistance programs that can be expanded to deliver whole-home retrofits.

State of Play and Ongoing Innovation in Program Delivery

Since its inception in the 1970s, the federal WAP has delivered tangible energy efficiency interventions (energy audits, envelope upgrades, appliance replacement, etc.) to qualifying households across the nation and has resourced and trained a network of state programs and local organizations. Despite its successes, WAP has shortcomings. Homes that have faulty wiring, structural problems, or mold, lead or other toxins present may be deferred from WAP — meaning that weatherization upgrades cannot be done until those other issues are addressed, which may require a new program and new point of contact. WAP funds cannot always be leveraged for electrical upgrades and structural repair or to address mold and dampness issues, nor can the funds be used to directly assist households with burdensome energy costs.

To properly address the systemic burdens in the housing stock, we need products and programs that deliver whole-home retrofits to low-income households. A whole-home retrofit delivers five critical products:

  1. Health and safety interventions.
  2. Weatherization and energy efficiency measures.
  3. Appliance electrification.
  4. Energy assistance.
  5. Renewable energy (where possible, including on-site generation or community renewables).

These whole-home retrofits will be best delivered by a “one-stop-shop” program that guides a participant through the entire process of connecting with technical assistance and contractors, getting verification and, critically, securing financial support. To deliver this model, federal, state and local governments, utilities and other providers need to be working together to ensure that funding sources can be stacked and braided together — not running competing programs that create barriers to access. In a whole-home retrofit approach, WAP funds could be seamlessly combined and delivered to a household in one package with lead remediation funds, federal tax credits, local utility rebates, climate change mitigation and resilience funds, energy bill assistance funds, health care funds and more.

Momentum in States and Local Governments

The whole-home retrofit model is being tried by states and cities across the country, which are starting to launch programs that layer funds together and deliver combinations of those five key products. Philadelphia’s Built to Last program braids together 20 funding streams to deliver whole-home retrofits. The D.C. Sustainable Energy Utility launched a low-income decarbonization pilot to electrify and provide solar access to participants’ homes. California’s Low-Income Weatherization Program has provided efficiency and electrification measures, solar, health and safety retrofits, and energy assistance benefits to thousands of households. The Maryland General Assembly passed a bipartisan bill in 2022 that was ultimately vetoed by the governor but would have required better leveraging of housing health and safety improvement dollars and utility energy efficiency incentive programs, established a specific energy savings target for utility-funded energy efficiency programs, and convened a new interagency task force to chart a course to retrofit all low-income housing over the next decade. The federal government is taking note, too: The WAP initiative announced millions of dollars for the Weatherization Readiness Fund for states to use to address health and safety concerns that would otherwise result in a deferral. And the Department of Housing and Urban Development recently followed through on a federal grant to initiate better coordination between lead remediation and WAP programs.

These examples indicate that braiding together existing programs can work, but doing this requires effort and will. Legislative direction can provide helpful guidance to state agencies. Legislation in California called for improved coordination among state agencies for weatherization. Washington state legislation expanded WAP and the Low Income Home Energy Assistance Program (LIHEAP) at the state level with health additions, known as WAP Plus Health. Such policy direction helps fill the gaps in the federal WAP program to provide the most benefit to building occupants.

Where Do We Go From Here?

A number of factors are driving an evolution in weatherization policies, including a recognition of increasing energy and housing costs and the numerous benefits from a holistic approach to improving buildings, particularly for low- and moderate-income residents. Consequently, we expect to see state policy efforts building upon successes in other states and innovating to respond to the needs of families. Besides the holistic, one-stop-shop and coordinated approach we describe above, states could look to policy solutions that feature:

  • Accounting of non-energy benefits in any cost-benefit tests applied to weatherization programs, including but not limited to health benefits, comfort benefits and environmental and climate benefits.
  • Investments in workforce development programs and strong labor standards for careers in the building, construction, efficiency, and heating, ventilation and air-conditioning sectors.

The growth of the whole-home-retrofit approach could not be coming at a more critical moment. As a result of the American Rescue Plan Act, the bipartisan Infrastructure Investment and Jobs Act and the IRA, billions of dollars are flowing to states and local governments to invest in communities and families. The federal WAP received an investment of over $3 billion; $500 million was allocated to the Energy Efficiency and Conservation Block Grant Program; hundreds of millions are going to LIHEAP to help with direct energy assistance and weatherization; nearly $9 billion will be delivered to states for new efficiency and electrification rebate programs; and so much more.

With this influx of funding, states can begin early preparation by creating cross-agency task forces and public stakeholder engagement processes, allowing them to plan out and then implement retrofit programs that are collaborative, whole-home, human centered and climate aligned. Now is the opportunity for states and local governments to think creatively, innovate, leverage existing WAP networks and braid together sources of funding for more holistic approaches to housing sector retrofit programs.