Date: 1984-05-03
Speaker: CARL LEVIN (democrat)
Chamber: S

PAUL S. SARBANES. and WILLIAM S. COHEN. legislation to reauthorize and expand the Solar Energy and Energy Conservation Bank. Our bill will authorize appropriations for the Solar Bank. as it is commonly known. at levels totaling nearly $5 billion over the 6 fiscal years 1985 through 1990. The legislation also makes an important expansion in the mission of the Bank. authorizing it to provide assistance to homebuilders constructing "superinsulated" housesresidential buidlings incorporating stateoftheart thermal energy efficiency features which. at an extra construction cost of only about 3 to 5 percent. can reduce the energy needed for home heating and cooling by as much as 90 percent. This legislation is part of the Energy Efficient America Act. a package of four bills being introduced today in both the Senate and the House of Representatives. with bipartisan support. This package of bills represents the most important effort in recent years to put America on a new energy course. toward a new energy future in which we have become highly efficient in our use of energy. Achieving this new future will help all in our country in many important ways. becoming wiser and more careful in our use of energy till let us overcome the personal hardship and economic stranglehold of high energy. reduce unemployment as people without jobs go to work retrofitting existing homes with energy conservation measures and renewable energy systems. and become more secure as we reduce our dangerous dependence on unreliable supplies of foreign oil. The Solar Energy and Energy Conservation Bank Reauthorization Act of 1984 would resurrect the best part of the Energy Security Act of 1980title V of that act. which initially created the Solar Bank. That title was a bold and innovative effort to improve residential energy efficiency. and to expand the use of nonpolluting. renewable energy resources in residences. by using and supplementing existing market mechanisms so they are available to lowincome and middle class Americans. The Bank subsidizes loans made by private financial institutions. States. and local governments for the installation of energy conserving improvements or renewable energy systems in residences. and to a limited extent makes grants for energy conservation retrofits. The amount of Federal assistance depends on the income of the homeowner or tenant making the energy investment. varying in amounts designed to insure the Federal funds are carefully targeted to make it possible for people to improve their residential energy efficiency who otherwise could not afford to do so. Because the Solar Banks funding is used primarily for subsidizing loans. three nonFederal dollars are "leveraged" for every dollar spent for the Bank. This makes the Solar Bank one of the most highly costeffective ways to use Federal funds to achieve greater energy efficiency. The Congress initially intended the Solar Bank to be one of our countrys foremost energy programs. authorizing a level of expenditures that was to reach more than $1 billion in fiscal year 1983. Tragically. however. the Bank became one of the major targets of President Reagans assault on the domestic budget. The President has repeatedly tried to eliminate all funding for the Solar Bank. and indeed refused to even start up the Bank until ordered to do so by a Federal court. In the face of this strong administration opposition. the Congress has provided only minimal funding for the Bank. totaling about $60 million over the past 3 years. Just as there was good reason in 1980 to establish a Solar Bank with the resources necessary to accomplish its purpose. so. too. is there good reason in 1984 to fully fund the Bank. Our legislation would do so. by authorizing appropriations of $300 million in fiscal year 1985. $450 million in fiscal year 1986. $650 million in fiscal year 1987. $925 million in fiscal year 1988. and $1.275 billion in each of fiscal year 1989 and fiscal year 1990. The need for this level of funding is compelling. for three reasons. First. the Solar Bank is one of our best weapons against the high costs of energy used in our homes. All of us who pay todays fuel bills know how much they have soared in recent years. The burden of these bills hurts all of us. but the lowincome and middleclass families who will be helped by the Solar Bank are hit especially hard. At the lowest end of the income scale. families pay as much as onequarter of their total income on home heating and cooling. and during the winter months in northern States the fuel bills often exceed monthly income. As a result. we have a new national crisis of people being forced to go without heat. Millions of families each yeaif have their utility service cut off because they are unable to pay their bills. Most arrange to be reconnected. but the burden of the high bills.threatens to condenm them to permanent poverty. Middleclass Americans. while more able to pay their bills. still must forego other goods and services because of their increased fuel costs. The only longterm solution to high fuel costs is to reduce the amount of fuel needed to heat and cool our homes. Fortunately. very substantial improvements in thermal energy efficiency are possible. Experts tell us we can reduce by 50 percent. or more. the amount of energy needed to keep our existing housing stock comfortably warm in the winter and cool in the summer. Also. renewable energy systems can be retrofitted in residences to use the free energy of the sun and the wind to supply much of our heating and cooling needs. Taking either. or both. steps can make substantial reductions in the amount of expensive fossilfuel energy a family needs. The one major obstacle to achieving this greater energy efficiency is the oftenhigh original investment needed to improve a buildings thermal efficiency or to install a new renewable energy system. It is this obstacle which the Solar Bar- is designed to overcome. by providing the marginal funding necessary to enable low- and moderateincome families to borrow money for residential energy improvements. At the level of funding authorized in our bill. 11.7 million American families1 out of every 7 in the countrywill be able to improve their homes to reduce their energy consumption. A very conservative estimate of the total savings to these familiesan estimate using current fuel costssuggests they will save about $70 billion because of their lower fuel bills over the next two decades. The second compelling reason to expand the Solar Bank is to create jobs and economic growth. The Solar pank is not only a good energy conservation program. it is a good jobs program. Funding the Bank at the level authorized in our bill would create 240.000 new work years of employment as people are hired to install energy conservation and renewable energy systems. and to supply materials for those operations. This is a ratio of direct job creation 50 percent better per dollar than traditional public works programs. And many of these jobs will be precisely the kind our country most needs: Entrylevel construction jobs. in which such unemployed people as minority teenagers. of whom half are unemployed. can learn construction job skills that can be used in other jobs. But this is only the beginninig of the economic benefits of the Solar Bank program. Conventional analyses show that each new Job that is created ends up creating another job as the first salary is spent and respent in the community. Using this conventional multiplier. the level of funding authorized in our bill would create an additional 240.000 jobs. for a total of nearly half a million. But this program will set in motion another kind of multiplier. as the consumer savings from the lower fuel bills gets spent or invested elsewhere. Since other goods and services are much more laborintensive than energy. this shift in consumer spending will create substantial additional economic growth. representing an additional 2.6 million work years of employment over the next two decades. The third. final. and most compelling reason for fully funding the Solar Bank is to reduce our reliance on insecure supplies of foreign oil. This is the primary purpose stated by the Congress for the creation of the Solar Bank. And that purpose is just as important today as it was in 1980. Despite the temporary surplus in the world oil market. there are several ominous signs indicating the continued dangers posed by our energy dependence. Domestic oil production is likely to fall shortly. as the Prudhoe Bay field is exhausted. unless another major reserve is discovered to replace it. Additional domestic discoveries are likely to be inadequate. because half the oil and natural gas industrys drilling rigs are inactive because of unfavorable economic conditions in that industry. The level of our imports of foreign oil has stopped its decline. and has now increased to 30percent above last years level. And. most disturbingly. a major war is now being waged in the Persian Gulf. with oil tankers getting set afire. and the world waiting daily for the halfexpected news that Iran has blocked the Strait of Hormuz to the oil traffic that supplies onesixth of the Western Worlds oil May . 1984 supply. Clearly. this is a time to renew our efforts to achieve energy security. not abandon those efforts. The Solar Bank can play a major role in our energy security program. As the Congress stated when establishing the Bank. "It is the purpose of this subtitle to encourage energy conservation and the use of solar energy. and thereby reduce the Nations dependence on foreign sources of energy supplies." If funded at the levels authorIzed in our bill. the Solar Bank will be able to achieve that purpose well enot Th to save the equivalent of more than I billion barrels of oil over the next 20 years. This could reduce by more than onehalf the amount of oil we import from the Persian Gulf. greatly improving our Nations economic and national security. For all these reasons. I commend this legislation to the attention of my colleagues. and urge them to join Sen ator HATFIELD. myself. and others in pushing for its prompt enactment.e