These subsidies usually equal the difference between 30% of the household's adjusted income and the HUD-approved fair market rent (for certificates) or the PHA-approved payment standard (for vouchers).
Elderly, Disabled, and Section 8 Assisted Housing Energy Retrofits
ARRA provides $2.5 billion to the Green Retrofit Program (GRP) for Section 202, Section 811, and Project Based Section 8. These funds are to be used for projects that include measures to promote energy efficiency and sustainability such as Energy Star appliances and products, insulation, windows, etc. These projects are to be administered by HUD OAHP. Funds can be distributed as either grants or loans of up to $15,000 on an individual project, with an expected average of $10,000. Funds may be applied for any time after June 15th, 2009 until funds are distributed. Properties that apply for the GRP do not have to refinance, and properties that have already participated in the HUD OAHP Green Initiative or that are described in Section 516(a)(4) of MAHRA are not eligible. More details are available in the GRP NOFA.
Weatherization of Section 8 Housing includes improving the thermal integrity of buildings by the installation of energy saving measures or equipment.
HUD Incentives to Reduce Utility Costs
Energy Conservation Measures (ECMs) can increase property values and improve the condition of the public housing stock. HUD incentives allow capital funds and any extra energy savings from ECMs to be allocated by the housing authority toward needed repairs and other eligible expenses. The incentives also reduce HUD's payments to public housing authorities for utility bills.
These incentives do not override the standard Performance Funding System treatment of savings from conservation measures but offer additional options for allocating savings.
If you are considering using these incentives read 24 CFR 990 and 24 CFR 905. Contact the HUD office in your region for approval and implementation.
Cost/Benefit Analysis of Energy Conservation Measures
U.S. Department of Energy helps select appropriate cost/benefit analyses and helps select the actions that have the best savings potential. The DOE provides instruction on simple payback analysis, standardized payback equations, life-cycle cost analysis, and selecting the "best" alternatives. The site also includes a life-cyle cost calculator.
Simple Payback Analysis
A highly simplified form of cost/benefit analysis is called simple payback. In this method, the total first cost of the improvement is divided by the first-year energy cost savings produced by the improvement. This method yields the number of years required for the improvement to pay for itself. For new construction, it can be used to evaluate conventional construction to energy-efficient design alternatives.
In simple payback analysis, the assumption is that the service life of the energy efficiency measure will equal or exceed the simple payback time. Simple payback analysis provides a relatively easy way to examine the overall costs and savings potentials for a variety of project alternatives. However, it does not consider a number of factors that are difficult to predict, yet can have a significant impact on cost savings. These factors may be considered by using a more sophisticated life-cycle cost analysis.
Standardized Payback Equations
One option is to take advantage of a building energy measurement and verification guideline that standardizes procedures for quantifying energy savings from energy-efficiency projects. Called the International Performance Measure Measurement and Verification Protocol (PDF 2.5 MB) guideline reduces risk and standardizes paperwork. It also enables loans to be bundled together and sold on a secondary market, like mortgages.