2019 Budget Plan Proposes Major Energy Star Changes

The White House released its 2019 budget proposal on Monday, and the popular Energy Star program is once again facing major changes. While Energy Star continues under the 2019 plan, it wouldn’t be funded by taxpayer money. Instead, the budget seeks to authorize the Environmental Protection Agency (EPA) to administer the program entirely through user fees from manufacturers.

“Product manufacturers that seek to label their products under the program would pay a modest fee to support EPA’s work to set voluntary energy efficiency standards and to process applications,” the budget proposal reads. Additionally, the spending plan would require the EPA to launch “a rulemaking process to determine which products would be covered by fees and the level of fees, and to ensure that a fee system would not discourage manufacturers from participating in the program or result in a loss of environmental benefits.”

The plan proposes an upfront appropriation of $46 million to keep Energy Star running prior to the collection of fees.

Currently, more than 300 companies participate in Energy Star’s windows, doors and skylights program. EPA says about 80 percent of all residential windows made in the U.S. carry the Energy Star label, and the program also certifies commercial buildings, new homes and industrial facilities for energy efficiency.

Additionally, Energy Star rates the energy efficiency of thousands of consumer products such as refrigerators, washers, TVs and many other devices.

The man who led the administration’s transition team for the EPA following President Trump’s election in November 2016 sees the change as positive.

“We think these reforms are steps in the right direction,” says Myron Ebell, director of the Center for Energy and Environment at the libertarian Competitive Enterprise Institute. “There are many similar programs for other products, and most of these are funded by the industries involved and conducted by non-government entities. We would prefer full privatization of the Energy Star program, but changing the funding source from taxpayers to the beneficiaries of the program is a good reform. If the program is really valuable, the companies that use the Energy Star label for their products will be eager to fund it.”

Meanwhile, the Window and Door Manufacturers Association (WDMA) is taking a wait-and-see approach to the overall budget proposal.

“WDMA has been evaluating the White House’s budget and as in previous years, additional clarification will be needed to gauge its full impact,” said WDMA president and CEO Michael O’Brien.  “WDMA is specifically seeking clarification regarding the proposal to collect user fees from product manufacturers participating in Energy Star. While the administration stated they would initiate a rulemaking to implement this proposal, several questions need to be answered about how this would work.”

However, that Energy Star fee plan worries advocates for increased energy efficiency.

“We are concerned that a fee-based proposal could discourage participation, erode program integrity and reduce Energy Star’s impact on energy consumption and consumer savings,” said Kateri Callahan, president of the Alliance to Save Energy.

The administration’s 2018 budget plan called for the elimination or privatization of Energy Star. However, the program survived the congressional budget process last year and was preserved, though with about half the funding it had in 2017.

“Energy Star is an effective program that is helping consumers and businesses save billions of dollars in energy bills,” says Lowell Ungar, senior policy advisor with the American Council for an Energy-Efficient Economy. “To build on its success, Energy Star needs to maintain its independence and its primary focus on serving consumers, and it needs stable funding that does not discourage manufacturers from participating. We think the program needs continued federal funding.”

As for the rest of the EPA, the proposed budget is $5.4 billion, a 34-percent decrease from 2017. The plan would also eliminate several programs, including Climate Change Research and Partnership Programs, the Indoor Air and Radon Programs, the Marine Pollution and National Estuary Programs, the Beaches Program and the Environmental Education Program.

Here’s a look at how other agencies that affect the door and window industry would fare under the budget proposal, which would cover October 1, 2018 to September 30, 2019.

Department of Energy (DOE)

The budget requests $30.6 billion for DOE, a slight increase from 2017. However, there are some big cuts, including $1.3 billion for the 2017 budget for the Office of Energy Efficiency and Renewable Energy, which focuses on early-stage R&D of energy technologies.

“We have concerns about the proposed cuts to DOE, specifically the Office of Energy Efficiency and Renewable Energy,” says WDMA’s O’Brien. “We will be working with Congress to ensure they are educated on these programs and how to appropriately fund them.”

Also targeted for elimination: the Advanced Research Projects Agency-Energy (ARPA-E), whose work includes a program aimed at improving the energy efficiency of existing single-pane windows.

The SHIELD (Single-Pane Highly Insulating Efficient Lucid Designs) program is currently funding 14 projects that focus on fenestration products that can be applied to existing windowpanes; manufactured windowpanes that can be installed into an existing window sash; and other technologies that can enable products in the first two categories. Project grants range from $3 million to $750,000.

The 2019 budget also gets rid of the Weatherization Assistance Program (WAP), which helps low-income families improve the energy efficiency of their homes, and the State Energy Program, which provides funds for upgrades such as new windows for lower-income households.

Department of Housing and Urban Development (HUD)

Funding for HUD would be cut by 18.3 percent to $39.2 billion. However, the budget requests $145 million for the mitigation of lead-based paint and other hazards in low-income homes, especially those with children.

“This funding level also includes resources for enforcement, education, and research activities to further support this goal,” the proposal reads.

Department of Labor (DOL)

The budget seeks to cut DOL’s funding by 21 percent to $9.4 billion. It maintains current funding for the Occupational Safety and Health Administration.

However, it invests $200 million in apprenticeships. According to the budget plan, “only 550,000 individuals—less than half of one percent of the workforce—participate in apprenticeships each year.” The DOL will also establish “a new industry-recognized apprenticeship system to modernize and expand the U.S. approach to apprenticeships.”

Apprenticeships have been gaining traction in the door and window industry in recent years.

Small Business Administration (SBA)

The budget requests $834 million for 2019, a 5.9-percent decrease from 2017, but it would still support more than $43 billion in loan guarantees for small businesses. The proposal also would supply more than $1 billion in disaster relief loans to businesses, homeowners, renters and property owners.

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