You’re a DC politician.  You want to do something to promote jobs growth.  You want to do something to make a reduction in carbon emissions more feasible and rapidly implementable.  And you’d love the idea of being able to give some kind of tangible value to your constituents.

Thus, Home Star is born.  The idea would be that homeowners would (either directly in the form of a voucher, or via overseeing programs, or via tax credits) get significant financial credit toward the cost of accredited home energy efficiency retrofits.  Stopping up air loss, improving insulation, upgrading appliances, etc.  It’s not rocket science, but it takes someone pretty knowledgeable to do it right.  And it can save a ton of energy and dollars for homeowners.

We’ve known about the potential savings for a while.  The White House recently put out a report showing that residential energy efficiency retrofits on a mass scale could save homeowners $21B per year and reduce carbon emissions by 160 million tco2e per year.  The problem has been getting homeowners to actually DO it.  Left to their own devices, many homeowners balk at the up front costs involved, and don’t know where to start finding a good retrofitter to work with.  So the savings don’t happen.

So it makes sense to devote some resources to giving it a kick-start, helping to reduce the upfront costs and putting in place programs to help homeowners find trustworthy, qualified consultants to do the work. 

And yet VCs are challenged by this market.  The problem for VCs isn’t that this isn’t an attractive entrepreneurial opportunity.  It’s that they don’t see how to achieve a 10x out of it.  Tough to find proprietary, scalable technology-type plays that would result in high value exits.  A couple of companies have been backed in the space by institutional VCs, but even Sustainable Spaces (one of the more visible venture-backed residential retrofitters) is said to be shifting away from service and into IT-based offerings.  There are a ton of home energy monitoring efforts, but it can be tough to see any being truly differentiated from the pack.  VCs are trying to get in through the meter via smart grid type investments, but still, at the end of the day… There will need to be someone actually providing the service part of the solution. 

Home Star would be a great idea, here’s hoping it happens.  And if it does, I would expect to see several VCs jump into backing service companies in the sector, following the money.  But it’ll be interesting to see how they position such investments in terms of their fit with the traditional VC investment model…

PS: I will be away from blogging capabilities for the next week, so Happy Thanksgiving everyone!