[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]


 
                       FULL COMMITTEE HEARING ON 
                     THE ROLE OF GREEN TECHNOLOGIES 
                      IN SPURRING ECONOMIC GROWTH 

=======================================================================

                      COMMITTEE ON SMALL BUSINESS
                 UNITED STATES HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               __________

                             JULY 10, 2008

                               __________

                         Serial Number 110-104

                               __________

         Printed for the use of the Committee on Small Business


 Available via the World Wide Web: http://www.access.gpo.gov/congress/
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                   HOUSE COMMITTEE ON SMALL BUSINESS

                NYDIA M. VELAZQUEZ, New York, Chairwoman


HEATH SHULER, North Carolina         STEVE CHABOT, Ohio, Ranking Member
CHARLES GONZALEZ, Texas              ROSCOE BARTLETT, Maryland
RICK LARSEN, Washington              SAM GRAVES, Missouri
RAUL GRIJALVA, Arizona               TODD AKIN, Missouri
MICHAEL MICHAUD, Maine               BILL SHUSTER, Pennsylvania
MELISSA BEAN, Illinois               MARILYN MUSGRAVE, Colorado
HENRY CUELLAR, Texas                 STEVE KING, Iowa
DAN LIPINSKI, Illinois               JEFF FORTENBERRY, Nebraska
GWEN MOORE, Wisconsin                LYNN WESTMORELAND, Georgia
JASON ALTMIRE, Pennsylvania          LOUIE GOHMERT, Texas
BRUCE BRALEY, Iowa                   DAVID DAVIS, Tennessee
YVETTE CLARKE, New York              MARY FALLIN, Oklahoma
BRAD ELLSWORTH, Indiana              VERN BUCHANAN, Florida
HANK JOHNSON, Georgia
JOE SESTAK, Pennsylvania
BRIAN HIGGINS, New York
MAZIE HIRONO, Hawaii

                  Michael Day, Majority Staff Director

                 Adam Minehardt, Deputy Staff Director

                      Tim Slattery, Chief Counsel

               Kevin Fitzpatrick, Minority Staff Director

                                 ______

                         STANDING SUBCOMMITTEES

                    Subcommittee on Finance and Tax

                   MELISSA BEAN, Illinois, Chairwoman


RAUL GRIJALVA, Arizona               VERN BUCHANAN, Florida, Ranking
MICHAEL MICHAUD, Maine               BILL SHUSTER, Pennsylvania
BRAD ELLSWORTH, Indiana              STEVE KING, Iowa
HANK JOHNSON, Georgia
JOE SESTAK, Pennsylvania

                                 ______

               Subcommittee on Contracting and Technology

                      BRUCE BRALEY, IOWA, Chairman


HENRY CUELLAR, Texas                 DAVID DAVIS, Tennessee, Ranking
GWEN MOORE, Wisconsin                ROSCOE BARTLETT, Maryland
YVETTE CLARKE, New York              SAM GRAVES, Missouri
JOE SESTAK, Pennsylvania             TODD AKIN, Missouri
                                     MARY FALLIN, Oklahoma

        .........................................................

                                  (ii)

  


           Subcommittee on Regulations, Health Care and Trade

                   CHARLES GONZALEZ, Texas, Chairman


RICK LARSEN, Washington              LYNN WESTMORELAND, Georgia, 
DAN LIPINSKI, Illinois               Ranking
MELISSA BEAN, Illinois               BILL SHUSTER, Pennsylvania
GWEN MOORE, Wisconsin                STEVE KING, Iowa
JASON ALTMIRE, Pennsylvania          MARILYN MUSGRAVE, Colorado
JOE SESTAK, Pennsylvania             MARY FALLIN, Oklahoma
                                     VERN BUCHANAN, Florida

                                 ______

            Subcommittee on Rural and Urban Entrepreneurship

                 HEATH SHULER, North Carolina, Chairman


RICK LARSEN, Washington              JEFF FORTENBERRY, Nebraska, 
MICHAEL MICHAUD, Maine               Ranking
GWEN MOORE, Wisconsin                ROSCOE BARTLETT, Maryland
YVETTE CLARKE, New York              MARILYN MUSGRAVE, Colorado
BRAD ELLSWORTH, Indiana              DAVID DAVIS, Tennessee
HANK JOHNSON, Georgia

                                 ______

              Subcommittee on Investigations and Oversight

                 JASON ALTMIRE, PENNSYLVANIA, Chairman


CHARLES GONZALEZ, Texas              MARY FALLIN, Oklahoma, Ranking
RAUL GRIJALVA, Arizona               LYNN WESTMORELAND, Georgia

                                 (iii)

  




































                            C O N T E N T S

                              ----------                              

                           OPENING STATEMENTS

                                                                   Page

Velazquez, Hon. Nydia M..........................................     1
Chabot, Hon. Steve...............................................     2

                               WITNESSES

Rema, Mr. Randy, President, Reese Electric Inc., North Bend, OR, 
  On Behalf of the National Electrical Contractors Association 
  (NECA).........................................................     4
Guiles, Mr. Ellis, Director of Sales & Marketing, TAG Mechanical 
  Systems, Inc. On behalf of the Air Conditioning Contractors of 
  America (ACCA).................................................     6
Wetstone, Mr. Gregory,Sr. Director of Government and Public 
  Affairs, American Wind Energy Association......................     8
Resor, Mr. James, Chief Financial Officer, groSolar, White River 
  Junction, VT, On Behalf of the Solar Energy Industries 
  Association (SEIA).............................................    11
Lucke, Ms. Andrea, Vice President of Sales and Design,Robert 
  Lucke Homes,Cincinnati, OH. On Behalf of the National 
  Association of Home Builders (NAHB)............................    13
Tindall, Mr. Kevin, Owner, Tindall & Ranson Plumbing, Heating and 
  Air Conditioning, Inc.,Princeton, NJ. On Behalf of Plumbing-
  Heating-Cooling-Contractors Association (PHCC).................    14

                                APPENDIX


Prepared Statements:
Velazquez, Hon. Nydia M..........................................    30
Chabot, Hon. Steve...............................................    32
Altmire, Hon. Jason..............................................    34
Rema, Mr. Randy, President, Reese Electric Inc., North Bend, OR, 
  On Behalf of the National Electrical Contractors Association 
  (NECA).........................................................    35
Guiles, Mr. Ellis, Director of Sales & Marketing, TAG Mechanical 
  Systems, Inc. On behalf of the Air Conditioning Contractors of 
  America (ACCA).................................................    39
Wetstone, Mr. Gregory,Sr. Director of Government and Public 
  Affairs, American Wind Energy Association......................    47
Resor, Mr. James, Chief Financial Officer, groSolar, White River 
  Junction, VT, On Behalf of the Solar Energy Industries 
  Association (SEIA).............................................    51
Lucke, Ms. Andrea, Vice President of Sales and Design,Robert 
  Lucke Homes,Cincinnati, OH. On Behalf of the National 
  Association of Home Builders (NAHB)............................    60
Tindall, Mr. Kevin, Owner, Tindall & Ranson Plumbing, Heating and 
  Air Conditioning, Inc.,Princeton, NJ. On Behalf of Plumbing-
  Heating-Cooling-Contractors Association (PHCC).................    64
The National Roofing Contractors Association - For the Record....    73

                                  (v)

  


                   FULL COMMITTEE HEARING ON THE ROLE
                     GREEN TECHNOLOGIES IN SPURRING
                            ECONOMIC GROWTH

                              ----------                              


                        Thursday, July 10, 2008

                     U.S. House of Representatives,
                               Committee on Small Business,
                                                    Washington, DC.
     The Committee met, pursuant to call, at 10:00 a.m., in 
Room 1539, Rayburn House Office Building, Hon. Nydia 
M.Velazquez [Chair of the Committee] Presiding.
     Present: Representatives Velazquez, Cuellar, Clarke, 
Sestak, Chabot and Akin.

           OPENING STATEMENT OF CHAIRWOMAN VELAZQUEZ

    [The prepared statement of Chairwoman Velazquez. may be 
found in the Appendix on page 30.]
     Chairwoman Velazquez. Good morning. I call this hearing of 
the Small Business Committee to order for economic recovery. It 
has powered markets and pulled our own financial system out of 
countless downturns. In the mid-1990s, for example, the dot-com 
boom led the country out of a recession and rejuvenated a 
struggling marketplace.
     Today, as our Nation strains under similar declines, new 
technologies are once again offering a lifeline. With jobs 
vanishing, payrolls falling and the cost of living 
skyrocketing, wind technology promises to lift us back up. Once 
considered an exclusively environmental issue the search for 
renewable energy has taken on a new role--economic stimulus.
     In this morning's hearing we will discuss the role of a 
small firm in America's effort to become ecologically aware. We 
will also explore ways in which ecoconscious entrepreneurs can 
set business back on track and turn the country's blue collars 
green. Sustainable industries will drive billions of dollars 
into the marketplace. They will also create hundreds of 
thousands of new jobs and bolster our Nation's cash-strapped 
working class. And while efforts to promote efficiency will 
take innovation and flexibility, our small businesses are up to 
the challenge.
     Today, entrepreneurs are leading the green revolution. 
Small firms comprise over 90 percent of the renewable and 
efficiency industries. Already these sectors are galvanizing 
the workforce. In 2006, they generated 8 million new positions. 
And in the near term, the wind power industry promises to 
single-handedly create 400,000 new jobs.
     These new positions will touch all facets of the 
workforce. Unlike the technical industry, that has created work 
almost exclusively for college graduates, today's jobs will 
benefit Ph.D.s and blue collar laborers alike. By 2030 as much 
as 25 percent of American workers, or 40 million jobs, are 
expected to fall under this green umbrella.
     By creating new positions and driving demand in sectors 
that already exist, wind technologies can create growth without 
reinventing the wheel. In other words, workers across the 
country can benefit from a sustainable economy without 
switching careers.
     In addition to supporting current American commerce, these 
advances present tremendous potential for trade and investment. 
American entrepreneurs hold the lion's share of green assets, 
which are now globally sought-after commodities; indeed, every 
world market has a need for these goods and services. If 
American entrepreneurs can fill this need, they stand to reap 
billions, possibly trillions, of dollars in export revenues. At 
present, analysts value that alternative fuels market at $1 
trillion.
     Investors recognize this tremendous profit potential and 
are clambering to capitalize on it. The same venture capital 
firms that backed the dot-com boom are now powering wind 
technologies. Already, these firms are pouring billions of 
dollars into industries like solar power; and as investors 
increasingly support green technology, the benefits are 
diffused throughout the entire marketplace.
     Innovation has brought us to the threshold of an economic 
revolution. Just at the tech boom transformed the American 
marketplace in the 1990s, green technologies can strengthen 
today's system.
     It is rare for a country to have the chance to do 
something both financially responsible and environmentally 
sound. Today, we have that chance, and we must ensure that the 
window of opportunity stays open. In doing, so we can look to 
our small businesses who are propelling our Nation's emerging 
wind economy.
     I want to thank all the witnesses in advance for their 
testimony. The Committee is pleased they can join us this 
morning, and we look forward to their insights on this very 
important issue.
     With that, I now yield to Ranking Member Chabot for his 
opening statement.

                OPENING STATEMENT OF MR. CHABOT

    [The prepared statement of Mr. Chabot may be found in the 
Appendix on page 32.]
     Mr. Chabot. Thank you, Madam Chairwoman, and good morning 
everyone.
     We are here to examine the role of green technologies and 
spurring economic growth. And I commend the chairwoman for 
calling this hearing and look forward to hearing the testimony 
of this very distinguished panel that we have here this 
morning.
     Before we begin, I would like to personally thank Ms. 
Andrea Lucke for making the trip all the way from Cincinnati 
today, and I will be formally introducing her here shortly.
     Energy is the lifeblood of the economy. U.S. economic 
prosperity is closely tied to the availability of reliable and 
affordable supplies of energy. It is not just the United States 
that is going to need more energy in the coming years; our 
traditional energy supplies will be increasingly strained by a 
dramatic growth in global demand. Today's topic not only has 
far-reaching applications for our economy, but our future 
energy needs as well.
     Great strides have been made in developing alternative 
fuel sources with a large amount of attention being given to 
renewable fuels. Wind and solar power also offer great promise 
in the quest for alternative resources. We have talked about 
ethanol, although there have been challenges there. Biodiesel. 
There are many sources that we do need to consider. I am 
certain that further research into alternative energy sources 
will yield new technology and techniques for producing energy 
that most of us here today in this room probably can't even 
fathom at this point in time.
     The industries that produce this green technology are 
relatively new and are still evolving. Small businesses with 
their new ideas and willingness to take risks to innovate will 
be at the forefront of these industries.
     I look forward to working with the Chair to find ways to 
help spur growth in these exciting new small businesses. Unlike 
some others on Capitol Hill, I firmly believe that this search 
for new energy sources should not be a zero-sum game, which is 
why I believe exploring these new energy production and 
conservation technologies is important.
     Our economy is driven by energy, and we must explore ways 
to meet our energy needs. That means looking for ways to 
increase production of everything we need, including oil, coal 
and nuclear capabilities in addition to these new methods. 
Neither must we neglect the current reality that without 
dependable, reliable and home-grown fossil fuels our economy 
will continue to falter.
     While looking at the future of energy independence, we 
have to make certain the Federal Government is doing all it can 
to provide the fuel our current economy needs to grow. Simply 
put we must balance research initiatives and incentives into 
renewable fuel technologies that will eventually replace our 
current reliance on fossil fuels while ensuring we have an 
abundant and affordable source of energy right now.
     Unfortunately, I do not believe that the major energy 
bills we have considered in this Congress have achieved this 
balance. These bills create no new energy sources to speak of 
and, if anything, make fossil-fueled energy more expensive, 
which in turn will make us even more dependent on foreign 
sources.
     These new energy technologies that will be discussed here 
today offer great promise to the American economy now and in 
the future, but we must also be able to maintain our current 
energy production while fostering growth in these exciting new 
fields.
     Again, Madam Chair, I appreciate your calling this hearing 
and look forward to hearing the testimony from our very 
esteemed panel here this morning. And I yield back my time.
     Chairwoman Velazquez. Thank you.
     And now it is my pleasure to introduce Mr. Randy Rema. Mr. 
Rema is president of Reese Electric, Inc. in North Bend, 
Oregon. Reese Electric, established in 1946, offers a full 
range of services in residential, commercial and industrial 
contracting and design.
     Mr. Rema is testifying on behalf of the National 
Electrical Contractors Association. NECA represents more than 
80,000 U.S. businesses and employs more than 750,000 workers in 
every State.
     Welcome. And you have 5 minutes to make your statement.

  STATEMENT OF MR. RANDY REMA, PRESIDENT, REESE ELECTRIC INC., 
  ON BEHALF OF THE NATIONAL ELECTRICAL CONTRACTORS ASSOCIATION

     Mr. Rema. Thank you, Madam Chair, Ranking Member Chabot, 
members of the Small Business Committee. Thank you for the 
opportunity to be here before you today.
     It is an honor and a privilege to appear before the 
Committee that has a tremendous impact on my business, my 
community and the thousands of electrical contractors who 
operate small businesses just as I do.
     In addition to speaking from the perspective of a small 
business owner on the role of green technologies in spurring 
economic growth, I am also here representing the National 
Electrical Contractors Association, NECA, an association of 
which my company is a member. NECA is the nationally recognized 
voice of the $130 billion electrical contracting industry 
responsible for bringing power and communication systems to 
communities, buildings and homes.
     I am Randy Rema, owner and president of Reese Electric in 
North Bend, Oregon. As Madam Chair said, the business was 
started in 1946. We became owner in 2004, 4 years ago. We had 
22 employees at that time. Today we have 61, and that is partly 
due to green technologies.
     Our company has been recognized as Business of the Year by 
our local Chamber of Commerce, and we ranked number one in the 
Nation in our category for safety by Associated General 
Contractors.
     By definition, "green building" represents a movement to 
reduce the adverse social, economic and environmental effects 
that existing buildings cause and reduce the impact of new 
building construction. The ultimate goal of green building is 
to transform the design and construction of buildings to be 
environmentally responsible, profitable and healthy places to 
live and work. The focus of my testimony will be how green 
building produces jobs and produces economic stimulus.
     In response to the growing green technologies movement, 
NECA has incorporated green technologies in our training and 
certification programs, spending $100 million a year on the 
National Joint Apprenticeship and Training Committee that is 
run in conjunction with the IBW. The NJATC has implemented 
green training programs to ensure that new electricians, as 
well as the industry's seasoned journeymen, have the skill sets 
necessary to operate in a green economy. And it is a good thing 
that NECA has invested in this training, as a recent study from 
the Political Economy Research Institute projected that the 
electrical contracting industry will be the largest single 
producer of jobs in the specialty contractor trade and will be 
one of the top five producers of jobs in a green economy.
     The reasons for such strong projections for green job 
growth for skilled electricians include, but are not limited 
to, retrofitting existing buildings with green technologies; 
developing more energy-efficient mass transit systems; 
installing smart meters, which help consumers reduce 
transmission load on the grid; and creating and installing 
maintaining clean, efficient self-sufficient energy systems for 
residential facilities and commercial buildings. Clearly, the 
role of the electrical contractor expands as the green economy 
grows.
     The electrical contracting industry is well positioned to 
promote, expand and create an industry marketplace where they 
are not only the installers of energy efficient electrical 
systems for our homes and businesses, but to be the providers 
of the generation systems to make us self-sufficient.
     I have experienced firsthand the economic business and 
environmental benefits of an industry transformation that is 
taking place towards green technologies and clean energy 
technologies. This year, we will have contracts worth roughly 
$2 million for solar panel installations, which represents 
almost 25 percent of our total business for the year. For 2009, 
I can project an additional $2 million worth of opportunities 
for those seeking building retrofit and other investments in 
green technologies. For my business, this means at least eight 
positions added, including staff, but eight electricians at 
family wages, which is very important.
     Just last year I put our belief in green technologies to 
the test and invested in a system for our building, a $212,000 
PV system. We had projected a 20-year payback; however, with 
the tax incentives that were available, that will be quite 
accelerated and with the rising energy costs it is even better.
     Federal tax incentives have helped to offset the 
substantial capital investment in renewable energy 
technologies. I understand that unless Congress acts, these 
incentives will expire at the end of this year. I believe that 
would be devastating to the momentum that has been built not 
only by our company, but companies throughout this Nation. 
These incentives have allowed my company to improve the energy 
efficiency of my facility and others throughout our area.
     In conclusion, green technologies provide the tools to 
build a better country, and our small businesses are laying the 
foundation for a better tomorrow. These technologies are 
working to transform our Nation's infrastructure and expand 
"green job" industries. Only by harnessing the power of these 
technologies and the potential job growth they bring are we 
able to both expand and grow our economy.
     Indeed, the future is green; and for my business, my 
community, my State and our Nation, I believe that means gold.
     Thank you for the opportunity to be here today, not only 
representing my company, Reese Electric, but also the National 
Electrical Contractors Association.
     Thank you, Madam Chair.
     Chairwoman Velazquez. Thank you, Mr. Rema.
    [The prepared statement of Mr. Rema may be found in the 
Appendix on page 35.]
     Chairwoman Velazquez. And our next witness is Mr. Ellis 
Guiles.
     Mr. Guiles is Director of Sales and Marketing at TAG 
Mechanical Systems in Syracuse, New York. For 20 years, TAG 
Mechanical Systems has been providing heating and cooling 
products and services to Syracuse businesses and home owners 
alike. Mr. Guiles is here to testify on behalf of the Air 
Conditioning Contractors of America. ACCA has over 4,000 air 
conditioning contractors.
     Welcome.

     STATEMENT OF MR. EELLIS GUILES, DIRECTOR OF SALES AND 
   MARKETING, TAG MECHANICAL SYSTEMS, INC., SYRACUSE, NY. ON 
  BEHALF OF THE AIRCONDITIONING CONTRACTORS OF AMERICA (ACCA)

     Mr. Guiles. Good morning, Madam Chairman.
     Chairwoman Velazquez, Ranking Member Chabot and members of 
the Small Business Committee, thank you for the opportunity to 
provide testimony on the exciting economic growth and job 
creation potential of green technologies in the heating, 
ventilation, air conditioning, and refrigeration, HVACR, 
industry.
     My name is Ellis G. Guiles, Jr. and I am the Director of 
Sales and Marketing of TAG Mechanical Systems, a heating, 
cooling and indoor air quality services company that services 
both residential and commercial customers in the Syracuse 
Metro, New York, area. As you noted, I am a member of the Air 
Conditioning Contractors of America, ACCA. I am also a member 
of the American Society of Heating, Refrigeration and Air 
Conditioning Engineers, ASHRAE, and the Building Performance 
Contractors Association of New York State.
     I am the author of LEED, Follow or Get Out of the Way, a 
book describing how mechanical contractors can implement green 
building practices in their businesses to make them more 
profitable.
     What I hope to demonstrate today is that going green with 
new HVACR equipment can have a positive impact on the bottom 
line for home owners, small businesses and the overall economy. 
In the interest of time I will highlight the most important 
points of my submitted testimony.
     ACCA and its industry partners foresee a wealth of job 
creation in economic development opportunities from the 
burgeoning green movement right here in America, because the 
majority of residential and commercial HVAC equipment sold in 
the United States is manufactured and warehoused in the United 
States. Any installation jobs held by contractors cannot be 
exported.
     At the same time, ACCA members see tremendous 
possibilities in greater energy efficiency through emerging and 
existing technologies that will lower utility costs, improve 
indoor air quality, create less CO2 and set aside more money 
for investment.
     The potential for America's small businesses and the HVAC 
contractors that service those small businesses for job 
creation, economic growth and environmental protection are 
limitless. However, in order to turn this potential into 
reality, Congress needs to provide direction and assistance 
through tax incentives, increased public awareness, promotion 
of proper installation and maintenance, and code enforcement.
     Increased building efficiency is the low-hanging fruit in 
the effort to reduce energy consumption, promote national 
security and stimulate the economy because our national 
inventory of HVACR equipment is old, inefficient and ripe for 
upgrade. More than half of residential utility bills goes 
toward heating, cooling and hot water appliances. Roughly one-
third of the energy consumed in commercial buildings goes to 
heating, cooling and ventilation. All told, Americans spend 
more than $142 billion on space heating and cooling for both 
residential and commercial buildings combined.
     Today's HVACR equipment is 30 to 50 percent more efficient 
than the installed base. In 2005, 39 percent of the residential 
central air conditioners and 60 percent of residential heating 
equipment were more than 10 years old. Since 1990, only 30 
percent of commercial buildings have had their main heating 
equipment replaced and only 37 percent have had their main 
cooling equipment replaced.
     In new construction, advanced planning, design techniques 
and a range of highly efficient options means that today's 
buildings are tighter, use less energy, are more comfortable 
and are healthier to live and work in.
     Realizing a 15 to 20 percent reduction in energy consumed 
by residential commercial buildings, using available 
technology, is not unreasonable. This would result in $28 
billion in saved energy expenditures while creating a 
tremendous number of jobs within the HVACR industry as demand 
for more efficient equipment and its installation grows.
     During the last 2 years, my company, TAG Mechanical, has 
worked with Actus Lend Lease as a part of their military 
housing privatization initiative at Fort Drum, New York, 
installing HVACR systems in 845 homes to New York State's 
Energy Star criteria. Our initial efforts involved right-sizing 
the HVACR systems and then working with Actus Lend Lease to 
achieve homes which generally have a 30 percent or lower energy 
usage as compared to a comparable code home. This results in 
lower energy costs for our soldiers who live in these homes, 
improved indoor environments and lower greenhouse gas 
emissions, a win for everybody because Actus Lend Lease was 
concerned about providing a superior product to their military 
customers.
     TAG Mechanical Systems has been chosen to provide design 
build services for Hope Lake Hotel and Resort, a 150,000-
square-foot facility located 45 miles south of Syracuse, New 
York, that will include a 106-room fractional ownership hotel 
combined with an indoor water park. The facility is 
participating in the USGBC LEED rating program.
     The original schematic designs for the hotel called for a 
geothermal heating system; however, cost constraints drove the 
construction team to look for alternatives. We have decided to 
install the variable refrigerant flow system in the hotel in a 
large portion of the complex. Current design projections 
indicate this system will be 5 to 10 percent more efficient 
than the geothermal system, will cost less to install and 
provide a higher degree of comfort in indoor air quality than 
the geothermal system.
     The variable refrigerant flow system's ability to modulate 
from 16 to 100 percent capacity allows it to precisely match 
the heating and cooling requirements of the spaces within the 
building. We project the hotel and lodge will obtain at least 
six points under EAc1 criteria of the LEED rating system and 
will be 28 percent more efficient than the baseline building.
     Improved efficiency may be the low-hanging fruit in our 
Nation's efforts to reduce energy consumption, but not everyone 
can reach that fruit to take advantage of its benefits. In the 
last 10 years, efficiencies for central air conditioning, 
heating, heat pumps and furnaces have increased tremendously, 
both through mandatory regulation and research and development.
     For example, in 2006, the minimum energy efficiency for a 
residential and like commercial central air conditioning was 
set by the Federal Government to increase by 60 percent. In the 
2 years since the Department of Energy raised these minimum 
efficiency standards, equipment manufacturers have seen a 25 
percent drop in shipments of new central air conditioning and 
heat pumps. While consumers have spent 25 percent more on 
replacement parts, they are choosing to maintain their older, 
inefficient equipment rather than upgrade to new, higher 
efficiency models.
     Cost is the hurdle to those technologies for home owners 
and small businesses. The higher efficiency products cost more 
up front due to higher equipment costs and installation 
requirements. However, the initial investment in high-
efficiency appliances earns a short payback with lower life 
cycle cost.
     ACCA has advocated for tax incentives to make higher-
efficiency equipment more attractive to residential and 
commercial clients. We believe these tax incentives assist home 
owners and building owners in making a more informed choice 
when purchasing new equipment. In many cases the incentives 
help justify the added up-front cost.
     Thank you for the opportunity to testify before you today. 
I would be happy to answer any questions you may have on my 
testimony later.
     Chairwoman Velazquez. Thank you, Mr. Guiles.
    [The prepared statement of Mr. Guiles may be found in the 
Appendix on page 39.]
     Chairwoman Velazquez. Our next witness is Mr. Gregory 
Wetstone.
     Mr. Wetstone is Senior Director of Government and Public 
Affairs to the American Wind Energy Association. AWEA promotes 
wind energy as a clean source of electricity for consumers 
around the world, with over 1,500 members, and advocates the 
association is the hub of the wind energy industry.
     Welcome.

  STATEMENT OF GREGORY WETSTONE, SENIOR DIRECTOR OF GOVERNMENT 
      AND PUBLIC AFFAIRS, AMERICAN WIND ENERGY ASSOCIATION

     Mr. Wetstone. Thank you very much, Madam Chairman and 
Ranking Member Chabot.
     I am Greg Wetstone, Director of Government and Public 
Affairs at the American Wind Energy Association; and I do want 
to thank you very much for the chance to be with you this 
morning and to talk about the tremendous potential for small 
business and the tremendous growth already that we have seen as 
a result of wind energy development here in the United States.
     Most of our 1,500 member companies are, in fact, small 
businesses. They produce critical wind turbine components like 
gears and bearings and electrical parts. They make composites 
for blades, they work construction as wind turbines are built 
around the country, and they participate in the shipping and 
transportation of parts in order to get this new energy source 
in gear.
     This is happening on a surprisingly large scale. Most 
Americans are not aware that wind, which was once a boutique 
source of electricity, is now a mainstream option for 
electrical generation. The U.S. currently has 18,000 megawatts 
of wind power already on the grid; that is enough for 5 million 
homes. Three years in a row, wind has been second only to 
natural gas as a source of new electrical capacity, and last 
year wind power provided 35 percent of all the new electrical 
capacity in the U.S., once again second only to gas. That was 
over 5,200 megawatts of wind power.
     So it is growing at a dramatic scale, and the reason is 
that the U.S. has one of the best wind resources of any nation 
in the world. And when you combine that with rapidly growing 
electricity demand--and that is what we have here in this 
country--we see that the U.S. is the biggest market in the 
world for wind energy development. That has meant that the 
construction and manufacture and operation of wind turbines has 
been a rare bright spot in an economy that, overall, has been 
pretty tough, spurring growth and creating jobs to the tune of 
more than $9 billion last year.
     Since January of 2007, 28 new wind industry manufacturing 
plants have been opened or operated in the United States. And I 
would be surprised--and the States where these are located are 
listed in my written testimony; there are a lot of them, and 
the list grows every week.
     Mr. Chabot, Ohio is a tremendous center of wind industry 
manufacturing. It is just starting now. The potential there is 
immense, and I would be surprised if there is another sector of 
the economy you can point to that is creating jobs at a faster 
rate than we are.
     A single wind turbine has 8,000 parts. And a typical 
turbine manufacturing facility is like an auto assembly plant 
in that it is buying component parts from a large number of 
subsuppliers, typically about 400 subsuppliers for a single 
turbine manufacturing facility. And that is creating a lot of 
jobs and helping a lot of small businesses that are providing 
these parts and transporting them.
     Wind turbine manufacturing is also spurring an expansion 
in demand for other kinds of products and materials. Suppliers 
for the automotive and other heavy equipment industries are now 
also increasing their production because of wind. So that is 
steel and concrete providers, foundries, fabricators. These are 
now providing raw materials, metal casting and machining for 
wind turbines.
     Because, when turbines are so large, there is a tremendous 
economy of scale in building the domestic manufacturing 
capability here in the U.S., rather than shipping these massive 
turbines and blades long distances, especially at today's fuel 
prices, today, about half of wind turbine components are made 
in the U.S. Only 2 years ago, that number was 30 percent; and 
if we could get stable Federal policies, long-term extension of 
the tax credit, we would see that number go up in terms of 
domestic manufacturing.
     In addition to spurring thousands of green jobs, wind 
power is helping to diversify our power supply, stabilize 
electricity costs; and that is good for any small business. 
Wind uses no fuel, so the price of electricity for wind is not 
affected by gyrations in global markets for oil or natural gas.
     Studies project more than $100 billion in consumer savings 
from a shift to wind power consistent with the renewable energy 
requirements that were included in the bill that passed the 
House last summer in the national renewable standard; and this 
recent growth could be just the beginning. The Department of 
Energy has projected we could get to 20 percent wind energy.
     There are some barriers. We have to build transition, 
build manufacturing capability, get stable domestic policies. 
But there is no technological requirement. And that growth 
would create 500,000 jobs, and that is just the beginning.
     Twenty percent wind would boost economic development in 
windy rural areas, promote energy security; and if you care 
about global warming, we are talking about effectively taking 
140 million vehicles off the road by using clean wind energy.
     Now, all this growth over the past several years, and 
particularly last year, has been a phenomenal bump for the 
economy, but today it is at risk because the production tax 
credit is on the threshold of expiration. And every time the 
PTCs expired--I direct you to the chart in our testimony; it 
has expired three times. Each time it expires, you see a 70 to 
90 percent decline in new wind development, and that is bad for 
our economy and it is bad for this country in a lot of ways.
     Already we are seeing impacts from the delay in extending 
the credit. Investors want to know, what is the tax policy 
going to be before they put the money down for a new project to 
go on line next year. A study by Navigant Consulting concluded 
that if the credit expires, it will cost us $11 billion in wind 
energy investment and more than 76,000 jobs here in this 
country. So we need the stability of a long-term extension to 
promote U.S. manufacture and to keep this industry growing.
     There is broad support across the political spectrum for 
extending the credit, and it is absolutely critical that 
Congress find a way quickly to get through the current impasse 
and enact a long-term, full-value extension of the tax credit; 
and that would be the starting point for a healthier economy 
and a cleaner energy future.
     Thank you so much.
     Chairwoman Velazquez. Thank you, Mr. Wetstone.
    [The prepared statement of Mr. Wetstone may be found in the 
Appendix on page 47.]
     Chairwoman Velazquez. Our next witness is Mr. James Resor.
     Mr. Resor is Chief Financial Officer of groSolar in White 
River Junction, Vermont; groSolar is the national leader in 
solar energy, leading customers to meet global warming by using 
solar energy to power their home and businesses.
     Mr. Resor is here to testify on behalf of the Solar Energy 
Industries Association. SEIA is the national trade association 
for the solar industry.
     Welcome.

     STATEMENT OF MR. JAMES RESOR, CHIEF FINANCIAL OFFICER, 
 groSOLAR, ON BEHALF OF THE SOLAR ENERGY INDUSTRIES ASSOCIATION

     Mr. Resor. Thank you Madam Chair, Ranking Member Chabot, 
other members of the Committee and the staff as well.
     Again, I am Jamie Resor with groSolar. We are an active 
participant in the solar industry, active in more than 40 
States throughout the country, and we focus on the installation 
of photovoltaic systems to generate electricity for homes and 
businesses.
     Some examples, to put this more in layperson's terms, are 
residential homes which are a key part of our market, municipal 
buildings, schools, stadiums, resorts, multiresidential 
complex, and agricultural operations. These are just some 
examples of the kinds of customers that we have that are using 
solar photovoltaic systems to generate electricity.
     One thing that is important to keep in mind is that 
solar--clearly, in the U.S., when people think of solar, they 
think of California, which is natural; that is where about 75 
percent of the market is. But I think it is important to 
realize that it is a broader opportunity.
     Our company is based in Vermont. The Northeast, for 
example, is a very important area for solar, partly because 
electric rates are very high; and that is the most important 
determinant as to where solar can make sense at the residential 
and commercial level. So States like New York State, 
Massachusetts and Connecticut are going to be very big growth 
areas for solar, in addition to California and places like 
that.
     The one thing I wanted to focus on, really, today is, we 
have heard a lot about and I concur there are a lot of 
environmental benefits to wind and solar energy, a lot of these 
energy efficiency steps that we have heard about, in terms of 
diversified energy supply, reducing energy consumption. And 
that is all very true.
     In addition, solar has the advantage that it can be a 
distributed source of energy. So it doesn't need to put 
pressure on transmission lines or other choke points in the 
distribution grids. In fact, we are working with Nstar, a 
utility in Massachusetts, just for that reason. They have 
congestion; and they either can spend a lot of money to upgrade 
substations for better distribution or they can try to bring 
about a program which reduces consumption in certain parts of 
their grid and increases the generation of things like solar 
which can be done at the point where you need it instead of a 
central power station.
     But what I wanted to focus on today is, given the 
Committee's mandate to really underscore the importance of job 
creation. GroSolar is somewhat of a microcosm of what you are 
seeing in the green economy. In the last 2 years, we have gone 
from about 25 employees to approximately 100 employees. We have 
raised $15 million of investment capital who see the 
opportunity to back us. We have set up a national platform for 
our company, whereas we were just based in the Northeast a 
couple of years ago.
     Not only are we a small business, but our customers, that 
we often sell product to and give design assistance, that are 
the ones doing the installation in many States, they are all 
small businesses. Like Mr. Rema represented, we will work with 
electrical contractors, for example, or plumbers or other 
construction people to actually do the implementation of a 
solar system.
     So if I look at our customer base, which is, say, 300 to 
400, they are all small businesses and privately held. So there 
is very much a ripple effect in what this Committee does for 
this legislation.
     Secondly, even when we do larger commercial projects--for 
example, we did the a solar hot water system for Fenway Park 
and the Boston Red Sox; we have done other projects for a 
winery. In rather large multi-residential firms, it might be 
800 kilowatts to 1 megawatt in multiple States.
     Again, when you look at our partners who are involved in 
implementation of these projects, they are all uniformly small 
businesses. So again there is a very important ripple effect 
there.
     To cite the same Navigant study that Mr. Wetstone cited 
for wind, very comparable statistics. We are looking at the 
drop-off of--or the loss of $8 billion investment in 2009 alone 
and approximately 39,000 jobs that would not be created if the 
ITC for commercial and the personal tax credit for residential 
are allowed to expire. We are already seeing adverse impacts in 
terms of some of our customers because, for businesses, 
uncertainty is a very difficult thing to manage; so already 
people are wondering what can I expect for 2009.
     As I am talking to customers about the potential for a 
project that can't get implemented this year, just because it 
takes some time to design it and get it implemented, already we 
are seeing a lot of wondering, what is Congress going to do in 
terms of the ITC. So we think it is paramount that the ITC be 
extended for the 8-year period and that we also have the 
personal tax credit for residential, and that it be--you know, 
that the $4,000 cap be eliminated as well to further stimulate 
job growth.
     Thank you very much for your time. I appreciate your 
interest in these issues.
     Chairwoman Velazquez. Thank you, Mr. Resor.
    [The prepared statement of Mr. Resor may be found in the 
Appendix on page 51.]
     Chairwoman Velazquez. And now I recognize the ranking 
member for the purpose of introducing our next witness.
     Mr. Chabot. Thank you, Madam Chair. I am pleased to 
introduce Andrea Lucke, who is the Vice President of Sales and 
Design for Robert Lucke Homes, the second oldest home builder 
in the greater Cincinnati area. In this capacity, she directs 
and manages the company's sales and marketing staff, along with 
designing, pricing and selling.
     Ms. Lucke also serves as the new President of the Home 
Builders Association of Greater Cincinnati where she provides 
leadership for the association of more than 1,300 member-
companies, including over 26,000 people working in the 
industry. She is the first woman elected President in the 73-
year history of the Home Builders Association.
     A native of Cincinnati, Ms. Lucke graduated from Ohio 
University and received her real estate license from Hunter 
College, and we appreciate your being here this morning, Ms. 
Lucke, to present your testimony. Thank you.

   STATEMENT OF MS. ANDREA LUCKE, VICE PRESIDENT OF SALES AND 
     DESIGN, ROBERT LUCKE HOMES, ON BEHALF OF THE NATIONAL 
                  ASSOCIATION OF HOME BUILDERS

     Ms. Lucke. Chairwoman Velazquez and Ranking Member Chabot, 
distinguished members of the Committee, my name is Andrea 
Lucke, and I am the 2008 President of the Home Builders 
Association of Greater Cincinnati and a member of the National 
Association of Home Builders. I am also a third-generation home 
builder for Robert Lucke Homes, one of the top 20 largest 
builders in the Cincinnati area; and I appreciate the 
opportunity to talk with you today about the progress home 
builders across the Nation are making incorporating green 
technologies and design within the residential construction 
industry.
     NAHB members build more than 80 percent of the Nation's 
new homes, and more than half of its members are currently 
incorporating green practices into the development, design and 
construction of new units. For over a decade, NAHB members have 
been researching and implementing environmentally friendly 
products into new homes. Consumer interest in the latest green 
design and products in the market continues to grow, and 
builders are excited to share the benefits of green 
construction and energy-efficient features.
     For home builders like myself, customer interest in homes 
that have reduced the carbon footprint has been a bright spot 
in this current down market. In fact, 40 percent of NAHB 
builders recently reported that it is easier to market green 
homes when market conditions are less than ideal, and 70 
percent of members report they will be at least moderately 
involved in green building by next year.
     In my experience, consumer interest lies in those 
technologies that are both energy efficient and, above all, 
cost effective. For example, many of my customers in the 
Cincinnati area have expressed a strong interest in geothermal 
heat pumps simply because of the significant savings associated 
with this water heating technology. Above all, I have found 
that increased education at both the builder and consumer level 
is needed for greater awareness of the many benefits of 
building green.
     NAHB recognizes the need to promote green building and 
innovation in green construction among its members and the 
public. In collaboration with the International Code Council, 
the first national consensus standard on residential green 
building in the United States will soon be approved by the 
American National Standards Institute, ANSI. The standard 
includes single-, multifamily construction, remodeling and land 
development, and is flexible enough to adjust to the specific 
resource in energy concerns in the country's different climate 
zones.
     The path to creating an ANSI-certified standard is 
certainly not an easy one, but our industry is motivated to 
address the country's growing environmental changes in a way 
that is comprehensive, flexible and preserves affordability 
everywhere.
     In addition to its work with the ICC, NAHB also 
established a national green building program that embodies a 
consumer education campaign highlighting the benefits of green 
building, substantially in housing design. Together, the 
National Green Building Standard and program will help home 
builders continue to drive technology and innovation in green 
design and construction.
     As Congress explores ways to encourage the growth of both 
green technology and the economy, it should look for ways to 
enhance it within the Nation's Tax Code. The section 45L New 
Energy Efficient Home Credit is a key incentive in shifting 
builders towards significant energy savings in new home 
construction. The program, which expires at the end of this 
year, provides for a $2,000 credit towards a home builder who 
constructs a qualified New Energy Efficient Home, certified to 
achieve a 50 percent reduction in energy usage. NAHB has heard 
from its members that this credit is especially beneficial to 
small builders who, in many cases, have the flexibility to 
react to individual marketplace references.
     The House did not include an extension of 45L in its 
Energy Tax Extenders package, and it is crucial that leaders in 
both Chambers immediately restore their commitment to extending 
or making permanent the only Federal incentive to promoting 
efficiency in new construction.
     I also want to quickly highlight the work that NAHB's 
workforce development arm, the Home Builders Institute, HBI, is 
doing to provide job training standards and opportunities in 
the green job trade. HBI crafted a new job training component 
that will be based on industry standards and will be used by 
high school and community college job training programs around 
the country. Through the joint efforts of NAHB, HBI and 
government entities thousands of young workers will soon have 
the opportunity to build a greener America.
     This is an important time for the housing industry, and 
NAHB appreciates the Committee's interest in spurring economic 
growth through green technology and construction. Thank you 
again for the opportunity to testify today. And I look forward 
to any questions you may have.
     Chairwoman Velazquez. Thank you, Ms. Lucke.
    [The prepared statement of Ms. Lucke may be found in the 
Appendix on page 60.]
     Chairwoman Velazquez. Our next witness--last but not 
least, Mr. Kevin Tindall--is owner of Tindall & Ranson 
Plumbing, Heating and Air Conditioning in Princeton, New 
Jersey. Tindall & Ranson was established in 1993 and provides 
plumbing, heating and cooling services.
     Mr. Tindall is here to testify on behalf of the Plumbing-
Heating-Cooling Contractors Association. PHCC has more than 
4,100 contractor members.
     Welcome.

    STATEMENT OF MR. KEVIN TINDALL, OWNER, TINDALL & RANSON 
  PLUMBING, HEATING AND AIR CONDITIONING, INC., ON BEHALF OF 
        PLUMBING-HEATING-COOLING CONTRACTORS ASSOCIATION

     Mr. Tindall. Thank you, Madam Chair, and distinguished 
members of the Committee for the opportunity to testify today.
     My name is Kevin Tindall, and I appear before you as a 
small business owner who represents over 4,000 member-companies 
of the Plumbing-Heating-Cooling Contractors National 
Association. Members of the association, all of whom are 
privately owned businesses, cover a broad spectrum of plumbing 
work, ranging from changing washers in residential homes to the 
most elaborate skyscrapers in the country.
     New green technologies are having a positive impact on our 
industry in spurring economic growth for plumbing contractors. 
Small businesses in the plumbing industry are at the forefront 
of the effort to develop and utilize innovative technologies 
which help conserve water.
     This year, the PHCC celebrated the 125th anniversary of 
our association. During this time, the plumbing industry has 
played a crucial role in the economic development and growth of 
our country while ensuring the public's health. To that end, 
the green movement and green technologies have and will 
continue to be an integral part, protecting not only consumers 
around the company but promoting growth of small businesses.
     The emerging water and conservation market has the 
potential to revitalize traditional plumbing businesses. We see 
green technologies as an opportunity to put our members to work 
and create jobs at a time when the current economic conditions 
are having a dramatic negative effect on households. Green 
technology is something that is positive for both consumers and 
small businesses alike, while at the same time providing a 
service for society. The green movement and the advancement of 
green technologies are benefiting every aspect of our industry, 
which is mostly comprised of small companies. Not only are 
plumbing contractors profiting from green technologies, but 
their workers, manufacturers and engineering professionals are 
also enjoying economic benefits.
     Through a partnership with various stakeholders, PHCC and 
its members are evolving with the green movement. Recently, the 
PHCC joined with the U.S. Environmental Protection Agency's 
WaterSense Program. This program helps reduce water consumption 
by creating an easy-to-identify label for water-efficient 
products that is backed by strict criteria and independent 
certification.
     The PHCC of California is currently offering a nationwide 
accredited certification for green plumbers. This program is an 
innovative way of training that assists plumbers in 
understanding their role in the environment and public health. 
The organization's goal is to train and deploy a "green army" 
of thousands of plumbers to promote the benefits of water 
conservation and the reduction of greenhouse gas emissions.
     As part of the plumbing industry, the United Association 
of Plumbers and Pipe Fitters, the union representing thousands 
of plumbers in the U.S., is a driving force in green skills. 
Furthermore, as a part of the effort to educate consumers, on 
June 1, 2008, the PHCC launched a Summer 2008 Water 
Conservation Initiative. This initiative challenges consumers 
to make at least one change in the way they use water this 
summer.
     By installing new technology, tremendous amounts of energy 
can be conserved while promoting growth and development of 
small contractors. According to the EPA, toilets account for 30 
percent of the water used in the home, and America wastes 900 
billion gallons of water a year by flushing old, inefficient 
toilets. If every home replaced just one old toilet with a 
WaterSense-labeled, high-efficiency water closet, the water 
savings would be enough to supply 10 million U.S. households 
with water for a year while providing opportunities for 
economic growth for plumbing contractors.
     Plumbing contractors are enjoying tremendous success with 
the evolution of the green movement in which we have been 
engaged for years. The commitment of the plumbing industry to 
water and energy conservation is demonstrated throughout our 
125 year history and recently in our national water campaign.
     PHCC feels strongly that we can achieve practical 
solutions without sacrificing economic growth. In fact, we can 
promote new technologies which will provide opportunities for 
the growth of small businesses through the use of these new 
green technologies.
     Thank you again for your time. I am looking forward to any 
questions you may have.
     Chairwoman Velazquez. Thank you, Mr. Tindall.
    [The prepared statement of Mr. Tindall may be found in the 
Appendix on page 64.]
     Chairwoman Velazquez. Mr. Rema, I would like to address my 
first question to you. If you retrofit existing buildings with 
new, energy-efficient technology, the savings over time must be 
large.
     Do you have any data on what the savings will be and over 
what period of time?
     Mr. Rema. Well, personally, from a system that we put on 
our building, that system, the cost was $212,000. It generates 
about $200 worth of electricity per month, so long term, over 
the life of the system, that is pretty substantial.
     From a short-term perspective, without the tax incentives, 
it is almost impossible to do not only for ourselves, but for 
our customers. So it is very important that the tax incentives, 
of course, be extended.
     But from an energy savings point of view, the carbon 
offset, our system has been in place about 6 months now, we 
have offset over 2,400 tons of carbon dioxide by that system's 
being in place.
     Chairwoman Velazquez. So let me ask you, how do you think 
we can get more small businesses to retrofit, to going to 
retrofitting the buildings that they own?
     Mr. Rema. By maintaining the incentives to do so and 
helping offset the cost. Over time, costs are starting to come 
down slowly. There are more manufacturing plants going into 
production. Even in our State of Oregon--we have one in 
Hillsboro, I believe groSolar--or is that Solar World? Excuse 
me.
     Anyway, PV Powered in Bend is making inverters. So in our 
State there are quite a few businesses that really are up and 
going; and they have got a lot of momentum, and we all hate to 
see that fade.
     Chairwoman Velazquez. But also I heard Ms. Lucke talking 
about the importance of educating not just on the tax 
incentives, but we have to educate consumers, and in this case, 
small businesses. So the government and the Small Business 
Administration could play a role in educating small businesses 
as consumers, as to the role that adopting efficient 
technologies will bring into their businesses.
     Mr. Rema. Absolutely. The benefits.
     Chairwoman Velazquez. Mr. Resor, many countries around the 
world are ahead of the U.S. in terms of green electricity 
generation, especially the European countries, European Union 
countries.
     What do you see as the primary reason that the U.S. is 
lacking--behind in solar as well as other forms of renewable 
energy production?
     Mr. Resor. Madam Chair, your point is absolutely right on, 
because Germany and Japan have had a much bigger solar industry 
than the U.S.; and the main reason is, they have had consistent 
federal support to create the incentives for the manufacturers. 
And also they have what are called "feed-in tariffs," so the 
solar power that is generated, the excess is bought at a higher 
rate.
     In the U.S., we have something that is called "net 
metering," which is helpful, where excess power is bought by 
the utility at least at the same price that they would sell it 
to you.
     So the main lesson is that they have had consistent 
incentives in place that have allowed manufacturers and 
companies to plan ahead.
     Just the earlier point about costs are coming down, the 
cost of the solar module, which is the main piece in the solar 
PV system, those costs are coming down because you are starting 
to get large -scale production. Now, quite frankly, most of 
that scale has been due to demand in Europe and so we are 
benefiting, but the main lesson is that it is consistent 
federal policies in place.
     Chairwoman Velazquez. Thank you.
     Mr. Wetstone, sometimes there is a natural reluctance to 
move toward products in the marketplace where there are long-
established alternatives. This is true whether it be a new 
television set or a different source of power to heat and cool 
one's office or home.
     How has your industry worked to educate consumers about 
the benefits of wind power?
     Mr. Wetstone. Yes, Madam Chairwoman. And, in fact, we see 
a tremendous growth in demand for wind and solar because 
consumers are receptive and they are willing to pay more.
     What seems to be the single most important factor right 
now in terms of what is the level of new clean energy we can 
bring on to the grid, particularly for wind--I think it is true 
for solar as well--is the availability of a stable tax policy. 
We have that now for other forms of electrical generation. They 
are receiving depletion allowances or other forms.
     Permanent tax treatment, for us, it has been year to year. 
If you look at the chart on page 3 in my testimony, you see 
that in 2000 when the credit expired, a 93 percent drop; 
expired again in 2002, a 73 percent drop; expired again in 
2004, a 77 percent drop--the first time we were able to get 3 
consecutive years where a credit was applicable; and the 
industry grew hand over fist, you know, 35 percent of the new 
electricity last year.
     This year, 2008, we will match 2007; we will have another 
great year. But what is happening now, because we haven't 
extended the credit, is, we are looking at a situation where 
2009 could look like these other years where we are taking the 
momentum out of the industry; and for those we want to invest 
in manufacturing that is a big problem.
     They want to know that market is there before they spend 
the money to retool what used to be a gear plan for automaking. 
And the automakers are downsizing and they are looking for 
markets. Do they go out of business or do they reinvest and 
create another product? And they need to know that market is 
going to be here.
     Chairwoman Velazquez. Mr. Resor, can you talk to me, to 
the Committee, about what is special about California?
     Mr. Resor. California has had a good incentive program 
that has really spurred the solar industry there. They do with 
the sun, but more importantly, they had a good incentive 
program in place that has been continuous. Also, they had high 
electric rates. And those are really the two most important 
things that drive solar.
     Chairwoman Velazquez. Mr. Guiles, H.R. 6049 that passed 
out of the House included provisions that would allow consumers 
to receive tax credits for installing certain hot water 
heaters, heat pumps and boilers.
     Can you talk about how these credits incentivize consumers 
to purchase more energy-efficient technologies and what will 
happen if these programs are not extended?
     Mr. Guiles. Most certainly, Madam Chairwoman.
     Actually, what has ended up happening to us is, we had 
that 2-year stretch from January 1, 2006, to December 31, 2007, 
where those tax incentives were in place; and we personally at 
TAG Mechanical took tremendous opportunities to market those. 
We found that probably 90 percent of the consumers that we 
dealt with at the residential level would choose to go to the 
higher-efficiency equipment because the tax credit allowed them 
to offset the incremental costs from what would have been 
standard-efficiency equipment to the high-efficiency.
     So, for them, it became the no-brainer in the equation; 
and we found that probably 90 percent of the time a consumer 
would say, well, if I can get a tax credit, why wouldn't I do 
this. So it was a very smart, smart thing to do.
     Unfortunately those tax credits lapsed at the end of last 
year. We still market and promote high-efficiency equipment. We 
find by doing a lot of education that a lot of consumers will 
take advantage of that without the tax credit, but our rate of 
seeing people deciding to go to the uptick has reduced.
     There are now--especially with economic conditions, gas 
costs where they are at, fuel heating costs where they are 
going to go this winter, people are starting to make that 
balancing act and say, do you know what, maybe I can't quite 
get there. And if they had the incentive, I can guarantee you 
they would.
     Chairwoman Velazquez. Thank you. I have other questions 
for the other witnesses, but I will come back on the second 
round.
     And now I recognize Mr. Chabot.
     Mr. Chabot. Thank you, Madam Chair.
     Mr. Rema, it is my understanding that there are some plans 
out in Oregon to tap the ocean tides out there as a source of 
energy to produce power.
     Could you explain a little bit about that process out in 
your State and, additionally, what problems are being 
experienced trying to implement this new power source?
     Mr. Rema. Well, it is a wonderful power source. Obviously, 
the ocean is always moving. There has been--the technology is 
there. It is being met right now with a little bit of 
resistance from our local fishermen, who have been very hard 
hit already anyway with decreased seasons, decreased stock of 
fish and also some of the environmental concerns.
     But I think that is a tremendous technology, and I have 
been trying to watch it. And it is moving, but it is moving 
rather slowly.
     Mr. Chabot. Are you aware if it is being done anywhere 
else either in the United States or around the world 
successfully at this point?
     Mr. Rema. I understand there are a couple of systems in 
New York. I believe there is one that is actually in the 
harbor, which harnesses the tidal movement in the channel, not 
necessarily out on the ocean floor.
     Mr. Chabot. Thank you.
     Mr. Guiles, you mentioned in your testimony about 
buildings nowadays are tighter and healthier than they have 
ever been. And some years ago that would have been an oxymoron. 
And I was just wondering if you could touch a little bit on the 
improvements that have been made in that area to make that 
possible.
     Mr. Guiles. Mr. Chabot, we have seen a number of 
improvements that have occurred over the last, I would say, 5 
to 10 years, mostly in the realm of code improvements.
     First place, and most efficiently with any building is, 
you have to build a good envelope. The very shell of the 
building is highly important; if you don't build that well, 
then we are going to have some problems there.
     We always chuckle a little bit in our office. When you go 
back and you think about the energy crunch of the 1970s where 
people coming out of that say, we built really tight houses, 
and now people are getting sick because you can't breathe in 
them. We go in and we test those houses now and we find out 
that they are not quite as tight as we thought they were.
     So we find that testing is a big, important part of 
determining just where we are with our buildings.
     But improved envelopes is certainly a big component of 
what has been going on. And probably the next major one is 
where we use most of our electricity goes for heating and 
cooling the buildings and improvements in efficiencies, and 
those technologies have been very tremendous over the last 10 
to 15 years. Manufacturers around the world, and specifically 
here in the U.S., have sunk billions of dollars into research 
and development, into technologies that are substantially more 
efficient than they are today. So we have seen those areas.
     And then we get into the areas of water conservation and 
domestic hot water heating. Again, we use a tremendous amount 
of energy to heat our water in this country; and, again, those 
technologies have improved substantially as well. So all of 
that taken in combination provides us with opportunities today 
as we construct new buildings, to make them substantially more 
efficient than the ones that we currently live and work in.
     So there are huge opportunities that exist out there for 
people to tap into just simply reducing the energy that we use. 
You know, a simple 20 percent reduction in electricity and 
fossil fuel use in this country is going to result in 
tremendous job growth, environmental impact improvements. And 
do you know what? It is going to put less load on the grid.
     All of it is going to be a very positive thing. But a lot 
of it is not going to happen if people don't have some 
incentives to kind of push them over the edge.
     Mr. Chabot. Thank you very much.
     Mr. Wetstone, relative to wind power, for some time there 
were some animal rights activists who were concerned about 
birds, especially, that were being injured or killed.
     Could you give us the latest credible research, what it 
indicates at this point about that whole controversy?
     Mr. Wetstone. Yes. Actually, the National Academy of 
Sciences has looked at the issue and concluded that wind 
turbines actually are not having any kind of a substantial 
impact on birds.
     There was a single project that was built in a flyway in 
California, in Altamont, that was a problem. It was one of the 
first wind projects ever and did have an impact on some 
important species there. Since then, I think there was a great 
deal more attention to siting. We are actually participating, 
our industry, with a nonprofit community and pulling together 
an American Wind Wildlife Institute to address these concerns.
     But the NAS concluded that wind turbines have less than 1/
1,000ths of the impact of house cats in terms of impacts on 
birds, and less than 1/10,000ths of buildings--you know, that 
they just simply fly into buildings.
     So it is not something we take lightly, but we do feel 
like there is not a serious impact on birds at this time as 
long as we are careful in siting.
     And the turbines have been redesigned so that they don't 
have a trestle crosspiece for the birds to perch on, which was 
the case at Altamont. You know, there are these solid poles 
now, and the blades are much bigger so that it is a little 
easier; they are not these short, rapidly spinning blades. So 
they can be seen and avoided.
     Mr. Chabot. Thank you very much.
     Mr. Resor, how has the cost-benefit dynamic changed over 
the past few years with respect to solar energy, and how much 
more efficient is the technology nowadays?
     And if you could comment, my State happens to be Ohio, and 
we used to hear that States like Ohio in the Midwest are more 
challenging when it comes to solar as compared to Arizona, 
California, et cetera. Could you touch on that as well?
     Mr. Resor. Sure.
     Generally, the cost-benefit is improving because you have 
got two major variables. One is, the cost of the equipment that 
you need for a solar system is coming down. Secondly, 
electricity rates are generally going up. And I think there is 
a very good study, put out recently by the Department of 
Energy, that looks at the country State by State and projects 
ahead as--I think they used a figure of about 4.7 percent per 
annum increase in electric rates, but that will vary by 
different regions in the country.
     They map out basically how the solar cost is coming down 
like this, utility rates are going up like this, and where that 
cross point occurs--is already occurring in parts of 
California, a little bit now in Connecticut, Massachusetts and 
other small spots, but if you go out 2 or 3 years they cross in 
many more States because your cost-of-system prices are going 
down and your electricity prices are coming up.
     And the third variable, which we don't have yet available 
at the residential level, is a way to finance the solar 
installation. The way you and I might go to a car dealership 
and buy a car, you know, you just sign some papers, you can buy 
it on a loan, a commercial company like Wal-Mart can install 
solar on their rooftops because they can get 20-, 25-year 
financing. There is a system set up to do that.
     There are now, just beginning, people to look at, how can 
we do that on a residential basis. Unfortunately, with a credit 
crisis right now, people are a bit distracted, kind of trying 
to protect what they have out there as opposed to coming up 
with innovative products.
     Mr. Chabot. Thank you very much.
     Ms. Lucke, as you mentioned in your testimony, the most 
recent Tax Extender bill that was voted, at least in the House, 
did not include the $2,000 tax credit for new homes achieving 
the 50 percent energy savings that was granted in the Energy 
Policy Act of 2005.
     Could you tell us if there were any reasons that were 
given to your organization by the bill's authors as to why that 
particular provision was not included? Did you get any feedback 
or anything on that?
     Ms. Lucke. You know, I didn't. I am not very familiar with 
that bill. We haven't, at least in the Cincinnati area, been 
able to in the past--you know, to work with that energy code. 
It is $8,000 to $10,000 on the builder, and at least in the 
Cincinnati area, it hasn't been very beneficial. So I am not 
very familiar with that.
     NAHB would probably be able to help you with that.
     Mr. Chabot. But it is your opinion that including that 
would be very important?
     Ms. Lucke. Absolutely, because it would only help with, 
especially a small business owner like myself.
     Mr. Chabot. As the other tax incentives that were 
mentioned here today, these are all important to the various 
industries that we have talked about?
     Ms. Lucke. Absolutely.
     Mr. Chabot. Thank you very much.
     And then finally, Mr. Tindall, with the recent run-up in 
gas prices--and they are over $1 a gallon, as we all know, now, 
relative to--and I know with your industry, plumbing, heating 
and air conditioning, you have a lot of vans and trucks that 
are out there, traveling all over the place--what impact is 
that having on the bottom line in your industry, if you know?
     Mr. Tindall. Well, our gas prices for my company are up 50 
percent, and that is with combining crews. You know, we are 
trying to take some measures to offset that problem.
     It is a significant problem. Combine that with commodity 
prices going up, too, and we have been hit from basically every 
sector. We have got the fuel problem; we have got commodity 
prices going up.
     DuPont recently announced a 20 percent increase. A lot of 
what we deal with are products that are produced with DuPont 
products alone. So it has been a significant problem, and we 
are forced, as I am forced as a company, to increase our prices 
because--to offset that charge. I mean, there is no other way 
around it.
     Mr. Chabot. And if I could conclude, just by a quick 
comment, and I would ask for the panel to acknowledge, even if 
we are using wind to provide more energy or solar for more 
buildings, et cetera, the fact is, with your businesses, I am 
sure you have vehicles and personal vehicles that are still 
getting around. So even if this is part of the problem, we 
still face the problem of a not sufficient energy supply 
relative to oil to put in our cars at this point, and that is 
something that needs to be dealt with seriously as well.
     Does anyone disagree with that statement?
     Mr. Wetstone.
     Mr. Wetstone. Well, not disagree, but I would certainly 
point out that there are connections between the electrical 
world and the fuel world. And in particular, I might mention 
that a long-time oilman, T. Boone Pickens, launched a campaign 
earlier this week promoting wind and other renewables with a 
notion that the percentage of the electricity now generated by 
natural gas--which is, I think, 22 percent--could be provided 
by renewables and that natural gas used to displace oil in 
vehicles.
     In other words, you can power vehicles right now--
technology is there--by natural gas. It is a pretty big change 
from a long-time oilman. And he is saying what we need to do is 
a crash course to expand these kinds of approaches: renewables 
efficiency, reduce the use of natural gas for electricity and, 
instead, put it in vehicles, and that could displace 38 percent 
of our oil imports, which is pretty substantial mostly. That is 
as much as we get from the Middle East right now and Venezuela 
combined.
     Also that gives time for plug-in hybrids to develop, and 
that is obviously another technology where we are using 
electricity instead of oil, so these worlds can connect.
     Mr. Chabot. It is my understanding that Mr. Pickens has 
invested a pretty fair amount of money in the wind industry.
     Mr. Wetstone. He has invested in wind and oil. And I 
imagine a lot of other things, I guess.
     Mr. Chabot. I am sure he has. Thank you very much. I yield 
back my time.
     Chairwoman Velazquez. Mr. Sestak.
     Mr. Sestak. Thank you, Madam Chairman.
     If I could follow up what I thought were really good 
questions by the ranking member and this interchange, because I 
was taken also by two things: the importance of getting the 
production tax credit, the ITC, and also the personal income 
tax credit for the solar, and the section 45L allowance 
continue to maybe increase from $2,000.
     But I was taken by what you said earlier. There is this 
crossover point that as prices go up and the cost of solar 
energy comes down, more and more people will be turning to you. 
But I guess, to his point to some degree, we would all like to 
get that price going up to come down because people are hurting 
out there at the cost of energy. And just making you more 
likable to come to isn't the only goal; it is how to make you 
less affordable.
     But we didn't speak much about R&D tax credits therefore. 
And so my first question is how often does a house turn over on 
average? Someone told me what it was in one hearing. But when 
you own a house, how long do you keep it?
     Ms. Lucke. Typically about 7 years.
     Mr. Sestak. Seven years is what I got told also before.
     So to make solar energy to be attractive, there is this 
more important point, I think: how much you should pay for that 
house with this solar energy, but you have only got a 7-year 
turnover point.
     That is, to me, the more driving factor; and that drives 
you to, what are the best research and development incentives 
we should be aiming for to make solar energy less expensive--
not more attractive just because of mass production and stuff, 
but what is that R&D? Is it nanotechnology or what?
     Mr. Resor. I think right now you can look at the venture 
capital community has invested a lot of different technologies. 
In my testimony, I summarize a couple of them.
     One is, for example, thin film, which is actually a very 
exciting company based in Toledo, Ohio, called Xunlight, 
spelled with an X-U-N-L-I-G-H-T, which is a representative 
example for a new form of solar that will drive the cost down.
     And they have got, I think, some R&D money from the State 
of Ohio, the University of Toledo and what-not.
     Mr. Sestak. Any Federal R&D?
     Mr. Resor. I am not aware of much Federal R&D.
     Mr. Sestak. Do you have any proposals for Federal R&D? We 
got yours for the tax incentives, but how about R&D, Federal?
     Mr. Resor. Again, I would defer to my colleagues at the 
Solar Energy Industry Association on that particular point.
     I will point out that extending the ITC, in a sense is 
triggering capital investment that goes in the things you want 
to end up at. So I think--let's not lose sight of--from a 
Federal policy perspective, the ITC is basically stimulating 
more demand and creating more certainty, and that is what 
people in Silicon Valley want to see.
     I spent New York yesterday with four sets of investors, 
and if we had an ITC passed in place today, the tenor of our 
conversation would have been more focused on how much money do 
you want to raise and where to deploy it, as opposed to, yes, 
you have a great business, there is an opportunity, but what 
about the ITC?
     Mr. Sestak. If I could--on the wind side, you cost, I 
think, about 5 cents per kilowatt hour, but the standard for 
electricity across the Nation is 12 or something--1.2 cents or 
something. What is the research and development to get you 
down?
     Unless my figures are wrong.  I mean, tremendous 
improvement from--80 percent reduction since the 1980s and all, 
but this is even more affordable with this crossover point.
     Mr. Wetstone. We do have a research and development 
agenda, and I would be happy to provide that for the record. I 
am not too knowledgeable on the details.
     But I want to be clear that if you are looking at new 
electricity--which is really where the question is, is bringing 
something new on line--that we are competitive with new gas and 
new coal at this point when you consider the uncertainty about 
the carbon pricing and coal.
     Mr. Sestak. Your points are well taken. I am just curious, 
what can drive energy overall down--overall?
     Can I ask you one other question? Is your new--there is 
LEED. What is the difference between LEED and this new national 
standard that NAHB is moving towards? Because--are 
environmental groups also involved in that consortium that is 
putting this national standard together?
     Ms. Lucke. There are, I guess, two points. The LEED 
program is pretty expensive.
     Mr. Sestak. But some people think it is a good marker.
     I am not arguing this way. It might be expensive.
     Ms. Lucke. The new National Home Builders green building 
program has had actually a representative from LEED and other 
organizations to put this program together, which is very 
helpful. But--we actually personally built a LEED home this 
year, so I am very familiar with the LEED process; but it was 
very expensive.
     And the new National Home Builders program is to help 
with--one, to make it more affordable for both the builder and 
the buyer and not have so many constraints towards what you 
need to do to get the certification. But there are other--you 
know, this is the national program. Other associations, 
locally--State and local--are also coming up with their own 
programs as well.
     Mr. Sestak. Thank you.
     I was just asking because there might be different 
standards out there soon. And who pushes what, and is it 
environmentally good but too expensive, or what is the cost, 
not quite as good environmentally, I guess that will be a 
challenge.
     But thank you. I am out of time.
     Chairwoman Velazquez. Ms. Clarke.
     Ms. Clarke. Thank you, Madam Chair, and ranking member for 
holding this very timely and important hearing today. Small 
businesses can play an important role. And combating global 
climate change, I think has been demonstrated by a lot of your 
conversation in testimony this morning. With these developments 
small businesses can and will drive our new and emerging green 
economy which can create new opportunities, good jobs and 
stronger communities.
     After reading all of the witnesses' written testimony, I 
commend all of you for recognizing the importance of green 
technologies and how to create job growth in economic 
development. But let me state that I believe that economic 
development is not truly sustainable unless we address the many 
needs, including the economic and environmental needs of our 
underserved communities, be they remote rural communities or 
densely populated inner cities which face these challenges on a 
daily basis and where conservation can often be illusive for 
low-income consumers.
     Let me ask if "green job" training programs were developed 
as a great way to move low-income residents, youth of color, 
into the green economy and, quite frankly, a green way of life, 
such a program could provide low-cost solar system installation 
to low-income home owners and training low-income residents 
from the community to do the work.
     Mr. Resor, do you believe that small solar energy 
businesses should partner with nonprofits to provide technical 
training that people need to partake in the emerging solar 
economy?
     Mr. Resor. Yes, I think there are several opportunities 
here. For example, we are a partner with Habitat for Humanity. 
We built some homes with them for, obviously, their new home 
owners.
     Another example is, we are working with a real estate 
developer that owns many units of affordable housing, several 
thousand units, and they are trying to lock in a fixed utility 
price. This is in Massachusetts and Connecticut, where rates 
are escalating. In terms of job training, we are going to face 
a constraint in terms of the amount of installers and people 
that can do the installation. Right now, we are not facing that 
constraint yet, because industry is still growing and, quite 
frankly, the economy is off. So it is easy to find that kind. 
But presumably, when things pick up again, we are going to need 
those kinds of training programs, I think, and partner with 
some of the groups that you mentioned. There is a lot of 
potential for that.
     Ms. Clarke. Do you believe that a program like this could 
provide people with practical skills needed for entry levels of 
the job market?
     Mr. Resor. Yeah. We find in our hiring to date--for 
example, if you look at the installation of a solar system on a 
home, you typically have a crew of three people. The lead 
person has to have a lot of experience. Quite frankly, the 
second and third person can really learn on the job. So that is 
an example where there is a fairly reasonable entry for new 
trainees.
     Ms. Clarke. And would you say that our educational systems 
are really preparing that next generation of technicians that 
will be required in the new green space that we are creating?
     Mr. Resor. Well, that is a pretty broad question when you 
get into our overall educational system.
     Ms. Clarke. Are there skills that you would say are 
transferable?
     Mr. Resor. Yeah, I think there are. When I listen to the 
testimonies of my colleagues here, we partner really with 
everybody at this table in terms of--I mean, less so wind and 
solar since they are more in parallel. But in terms of heating, 
cooling people, contractors, electricians, plumbers, home 
builders, very much we share a lot of the same resource base in 
terms of personnel and the kinds of training that I think are 
needed.
     Ms. Clarke. Mr. Wetstone, would you say that this is 
applicable to your industry as well?
     Mr. Wetstone. I think it is. I think you see wind 
development more concentrated in rural areas. And there, I 
think, is a real opportunity--in windy rural areas, both--for 
folks to provide their own power with smaller wind facilities.
     A lot of places where agriculture has been tough, where 
you are looking at what happens in a drought year, what happens 
when the market goes down, where we see farmers who are still 
able to work their land, but they are able to have utility-
scale turbines and they are getting payments of $3-, $4-, $5-, 
$6-, $8,000 a year for each turbine on their land and getting 
free electricity to boot.
     Ms. Clarke. So in those remote areas, remote rural areas, 
this is an opportunity for young people growing up in those 
areas that tend to migrate because of a lack of opportunity to 
see the green--the growth of the green industry as something 
that perhaps they could pursue as a career?
     Mr. Wetstone. Exactly. And, in fact, a number of our 
companies are supporting training and renewable engineering at 
local community colleges, because there is a tremendous demand 
for jobs right now in that area, and there is not enough 
training.
     We have a lot of government support, for example, for 
training nuclear engineers, but it has been a long time since 
we built a nuclear power plant, and maybe that will happen--I 
don't know--but meanwhile we are producing those graduates, and 
our companies are finding it difficult to find trained 
engineers.
     Ms. Clarke. Thank you both very much.
     Madam Chair, I yield back.
     Chairwoman Velazquez. Thank you, Ms. Clarke.
     Mr. Tindall, you spoke about conservation efforts in terms 
of water. Installation of new infrastructure can make a big 
difference in conservation efforts. This includes products like 
low-flow toilets and high-efficiency faucets.
     How accessible are these materials and building techniques 
to small business contractors?
     Mr. Tindall. Well, the materials are readily accessible. 
As a matter of fact, it came to my attention this week, by one 
of the national staff members, that one of the primary 
manufacturers of China has gone away from--or is moving towards 
going away from--producing the existing low-flush water closets 
of 1.6 gallons per flush and are going to go solely to the 1.28 
gallon technology.
     And that is due to consumer demand. It has hit these 
manufacturers at a much greater rate than what they ever 
anticipated, and we assume it is because of the high cost of 
water. The water utility rates are going up, and not only when 
you--water, it is--up to 12 percent of the Nation's energy 
produced, electric energy, goes to treating, cleaning or 
pumping water.
     So if we conserve water by installing these readily 
available products, we can not only save the energy it costs to 
move the water--in California it is 20 percent--we can also 
save the energy it takes to heat the water when it gets into 
the home if it is a faucet that is using less water.
     These products are readily available. We do feel, as an 
industry, though, that--as the rest of the industries here, 
that there needs to be some kind of a push to the consumer to 
get them over this hurdle of cost in this time, which there 
hasn't been in our industry.
     Chairwoman Velazquez. What are you doing, or your 
industry, in making sure that your contractors and their 
workers can meet increasing demand for these products and 
techniques?
     Mr. Tindall. Well, as I stated in my testimony, that we 
had--green plumbers is training.
     And we are out--you know, the objective this year is to 
train 10,000 existing plumbers in green technologies; and that 
program offers the consumer the option for water conservation. 
Typically, a plumber comes into your home and doesn't 
necessarily offer you these available technologies.
     Some of them are relatively inexpensive. Changing your 
aerator out on a lavatory faucet from a 1.5-gallon-per-minute 
flow rate to a 0.5-gallon-per-minute flow rate can make a huge 
difference in water consumption in a home, and it is a 
relatively inexpensive repair. It can be done at the time of 
the service call.
     So this training process of the existing workforce to 
retrain them to offer the consumer energy/water conservation 
measures is up and running, and to date, I believe they have 
trained 1,500 people and the goal is 10,000 this year.
     Chairwoman Velazquez. Thank you.
     Mr. Akin.
     Mr. Akin. Thank you, Madam Chair.
     We have got three Committees at the same time; it is kind 
of hard to be at all of them, and so I missed your testimony. 
But I appreciate all of the different things that you are doing 
to try and make things work together here.
     One of the reasons that I tend to be a little bit 
skeptical, but perhaps aside from the engineering background 
is, I have seen a lot of these environmental efforts that we 
have made from a government point of view being almost 
perfectly counterproductive.
     We try to do something like put MTBE in gasoline because 
it will burn a little bit more efficiently, and instead, the 
MTBE washes out of the gasoline into the groundwater and you 
create more problems than what you wanted.
     And there are a lot of other examples like that. The fact 
that people drive very heavy, big, truck-type cars is partly 
because of the fleet mileages, which we thought was going to 
make it so people would drive around in smaller, more efficient 
cars.
     There are a lot of times where we pass legislation, it 
kind of does the opposite.
     I am just curious on the low-volume toilets, is that 
another one of these deals where you say, oh, yeah, you can 
only do it with half a gallon, but then you have to flush it 
four times or something like that? Are we sort of cutting off 
our nose to spite our face with some of these technologies?
     I guess that is a concern that I have, that we make sure 
that things become practically doable before we jump into them 
too rapidly.
     Mr. Tindall. Is that something you want me to comment on?
     Mr. Akin. Yes, if you want.
     Mr. Tindall. We, as an organization, have the exact same 
concern.
     As many of you may be aware, in the early 1990s when there 
were Federal mandates to reduce water consumption, part of the 
energy bill, the government required the manufacturers to go 
from the existing 3.5-gallon-per-minute flush water closets to 
1.6-gallon-per-minute water closets. And as many of you 
probably had in your home, they simply didn't flush, and the 
consumer did not have a satisfactory experience.
     The plumbing contractors ended up sharing most of the 
burden of that on us because we are the direct contact with the 
consumer. They would come back, you have sold us a product that 
doesn't work. This process--
     Mr. Akin. Were you just limiting how fast the water could 
refill the tank or how much the tank actually held?
     Mr. Tindall. Well, basically all they did with the first 
generation of the 1.6-gallon-a-minute flush toilets was that 
they just limited the amount of water in the tank. There wasn't 
really any redesign of the existing water closet, so the 
product didn't work.
     That has since been worked through, and the new products 
are quite satisfactory.
     This round of product going from the 1.6 down to the 1.28 
is a different scenario. The manufacturers have driven this. 
The manufacturers, they want this product out. They think--they 
have redesigned, reengineered these products, and they believe 
they work.
     The PHCC, as an organization, is concerned, and we want to 
take a systems approach to this. It doesn't do a lot of good if 
we can get the waste through the product and then can't get it 
out of the home, or we can get it to the street and can't get 
it to the sewer plant, or we get it to the sewer plant and the 
design of the sewer plant is such that the water waste solid 
mixture is different than what it was originally designed for.
     So we 100 percent agree that going forward with new 
technology such as greywater systems--there are rainwater 
reclamation systems. All these technologies need to be taking a 
systems approach. And we had--the PHCC is involved with the 
EPA, WaterSense, with the Alliance for Water Efficiency, with 
IATMO, with the I Codes. And it is still being worked out as to 
who is going to end up writing the standard. But we believe 
that the standard ought to be fully encompassing of the whole 
system.
     Mr. Akin. I appreciate what you are saying here. You 
answered my question exactly.
     We just passed a bill that said--it was a bright idea that 
Congress came up with that we are going to get rid of light 
bulbs, which is an odd thing because there is a picture of 
bright ideas that has light bulbs. We are going to get rid of 
light bulbs and we are going to go with the mercury type. Well, 
those have got a big advantage. They use a quarter or less of 
the same energy as an incandescent bulb.
     But they have disadvantages; that is, you break one in 
your home and you have got to call a hazmat team to clean it up 
for you because of the mercury in the bulb.
     In engineering there is always a balance between these 
things, and we have to just be cautious as to how we proceed, 
it seems, to make sure that we don't get lopsided.
     But, Madam Chair, I didn't mean to get too far afield from 
your hearing here, but it is a concern that we have to consider 
all sides of the equation. Thank you very much.
     Chairwoman Velazquez. Thank you.
     Well, so much is going on in terms of how can we address 
the issue of energy independence in this country and how can we 
help legislatively to move forward an agenda that will green 
the American economy and create jobs.
     We have a legislative instrument; the House passed H.R. 
6049. We all heard here how important it is to incentivize a 
green economy by providing these type of incentives not only 
for the small businesses, but also consumers. We will continue 
to work in advocating for these extenders and reach a 
compromise between the House and the Senate.
     So I want to thank all of you for being here. I also want 
to take this opportunity to recognize Mr. Rema's wife and 
daughter. I believe they are here. And this is their first trip 
to Washington. So welcome.
     To all the witnesses, thank you for your participation.
     I ask unanimous consent that members will have 5 days to 
submit a statement and supporting materials for the record. 
Without objection, so ordered.
     This hearing is now adjourned.
     [Whereupon, at 11:35 a.m., the Committee was adjourned.]

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