North Pole resident Nancy Swartz participated in the Alaska Housing Finance Corp.'s home-energy rebate program two years ago. Swartz and her husband installed a new water heater, added blown insulation to their attic and installed a new main door in the garage. They spent around $10,000 on the upgrades, all of which was reimbursed through the program.
As a result, the Swartzes raised their energy rating from 3-star rating to 4.5-star. One of the reasons the couple chose to use the program was fuel cost -- this winter, from October to January, they spent $2,000 on heating their home.
The upgrades helped, cutting their home heating fuel consumption by 200 gallons a year. Savings like that are one reason why the rebate program is widely popular. The housing finance corporation keeps a list of 500 program applicants year round; most Alaskans who apply for up to $10,000 of energy improvement reimbursements live in Anchorage, by far the state's largest city. If Gov. Sean Parnell's proposed fiscal year 2014 budget passes House and Senate, the rebate program will receive $20 million in funds for next year. Without funding, the program would end.
The program is open to all owner-occupied, year-round Alaska homeowners. There are no income requirements, but participants pay up front and are reimbursed for eligible improvements. Homeowners can't simultaneously participate in the rebate program and the corporation's weatherization program, another popular energy-saving program.
$137 million in four years
Amid rising heating costs, Alaskans' interest in saving money on energy continues to climb, said Jimmy Ord, the housing finance corporation's energy information manager. Besides alleviating the strain on homeowners' bank accounts, the program is meant to improve the longevity and durability of the state's housing market.
The program began in May of 2008. In the roughly four years since, until June 30, 2012, more than $137 million has been spent through the program. During its initial year, more than 1,000 people were on the program's waiting list, Ord said. The corporation has since curtailed its ambitions. The waiting list was cut to 500, so workers could manage the large applicant pool efficiently and to manage its resources. The program's funds come solely from the state budget, Ord said.
But only 63 percent of participants complete the program. For those that follow through, the average rebate is $6,382. At the end of fiscal year 2012, some 16,877 rebates had been paid out to energy-conscious Alaskans.
On average, 30% cut in heating costs
On average, according to AHFC homeowners reduce their heating costs by 30 percent, an estimated annual savings of $1,464 for people outside of Anchorage. For the state's city dwellers, it amounts to $1,033 a year, Ord said.
For the Swartz family, the savings ultimately weren't enough to keep them in Alaska; they are in the process of selling their home. Both husband and wife are retired, and the couple cannot afford the energy costs of Interior Alaska, Nancy said.
"Whatever is decided on the state's gas distribution is years away and will not be available to all the outlying areas," Nancy said. "We've lived in Alaska 37 years, and it's a great place to raise a family. We hate to leave, but the combination of high energy and long, cold winters have taken their toll."
Communities across Alaska's broad midsection, including the populous Fairbanks-North Star Borough, are starving for an affordable source of energy as home-heating costs soar. Recent legislation aims to alleviate the Interior's sky-high costs by funding a liquefied natural gas processing facility on the North Slope along with roads to truck it to Fairbanks and beyond. But state politicians have boasted about cure-all projects before, and many Alaskans are seeking more-immediate solutions.
The rebate program's initial step is an energy assessment, which the corporation partially pays. This occurs before improvements are made so assessors can identify eligible improvements. The payout, or payback, comes after homeowners drop thousands of dollars into upgrades like water heaters and insulation.
Waiting for final audit
Generally, homes initially receive a two star-plus rating. Those dwellings can probably move up a rating by decreasing airflow, Ord said. About 40 percent of the homes reach a four star-plus rating following the upgrades, he said.
The program isn't for everyone, said retired Anchorage Police Department officer and Wasilla resident John Reed. He completed his upgrades but struggled through the process due to a limited income, he said. Those upgrades included a $3,000 water heater.
Reed won't know whether he's getting money back until a final audit is completed. His home initially received a two star-plus rating. But he's optimistic his upgrades will bump the home up a rating level.
"My only hope is to get back the money I put in," Reed said. "I started out in the hole with the first inspection. I'd hate to spend all this money and get a fraction in return."
Contact Jerzy Shedlock at jerzy(at)alaskadispatch.com