Introduced to Amend Tax Credits and Tie it to ENERGY STAR; Industry
October 20, 2009
For months, there has been action from many in the fenestration
industry to modify the .30/.30 standard in the window tax credit
so it is tied to ENERGY STAR® programs (CLICK
HERE for related article). Almost eight months since .30/.30
was introduced, legislation (S. 1792) was introduced to this end
on October 15 by Sen. John Rockefeller (D - W.Va.) and Sen. Chuck
Grassley (R - Iowa) and was referred to the Committee on Finance.
The bill would replace the .30/.30 standard for the $1,500 tax credit
with the 2010 ENERGY STAR standards for windows, doors and skylights.
It would apply to purchases in 2010. If the bill passes the new
criteria would go into effect after December 31, which means it
would have to pass before that date.
Some organizations, such as the Glass Association of North America
(GANA), say a tie to the ENERGY STAR program would be good for the
"Historically, GANA has largely supported the ENERGY STAR program.
Linking tax credits to benchmarks that do not line up with ENERGY
STAR requirements adds to the uncertainty that the glazing industry
has recently faced with regard to energy efficiency initiatives
at state and federal levels," says Bill Yanek, GANA executive
vice president. "What the glazing industry needs most now with
regard to energy-efficiency requirements and government incentives
is clarity. Linking tax credits to the ENERGY STAR program will
add clarity to energy efficiency incentives."
The American Architectural Manufacturers Association (AAMA) also
weighed in on the bill, as its members would have liked to see the
tax credit more closely tied to ENERGY STAR.
"In January, AAMA and its members urged the U.S. Senate and
House of Representatives to support legislation that would extend
and expand the 25C tax credits for energy-efficient home improvements,
including ENERGY STAR products such as doors and windows,"
says AAMA president Richard Walker. "When the .30/.30 legislation
was enacted, there was much confusion within the marketplace. Understandably,
ENERGY STAR qualifications are easier for consumers to understand
than U-values and solar heat gain coefficients."
Walker says he is pleased to see a bill introduced that would tie
the credits to ENERGY STAR.
"While the energy savings realized with ENERGY STAR technology
are well documented--and while manufacturers have invested in manufacturing
products that deliver superior energy-efficiency--incentivizing
consumer behavior is an ideal way to encourage homeowners to invest
in our lagging economy," Walker says. "In short, these
tax credits help to build consumer demand for energy-saving technology,
create thousands of jobs, save precious energy resources and reduce
consumer energy bills."
Some industry companies have expressed a positive reaction to the
bill--though Gorell president Wayne Gorell notes he has mixed feelings
"I'm hesitantly in favor of the proposed legislation,"
he says. "I think the .3 U-value requirement is better for
everyone than the ENERGY STAR standards, but the shading coefficient
is better to change with the geographic location. Hopefully ENERGY
STAR will adjust the standards to reflect a better U-value but retain
the shading coefficient to adjust to climatic conditions in the
Truseal's Ric Jackson says it is good for the industry that this
action has been taken.
"It's not easy to make one window for all environments,"
he says. "It's good for consumers because .30/.30 was overkill
in the South, etc."
He adds that if passed, this should help positively reinforce ENERGY
STAR as a program that is well-designed and will help strengthen
legitimacy of the program.
The current tax credit tied to the .30/.30 standard effectively
eliminates skylights from even qualifying for tax credits (CLICK
HERE for related article). Skylight manufacturers such as VELUX
have been working to get this changed since .30/.30 was introduced
since it virtually eliminates any of its products from qualifying.
"If S.1792 is enacted, it should enable our customers to finally
participate in the drive to replace old skylights with the most
efficient, highest quality and readily available affordable units
on the market," says Roger LeBrun, product certification engineer
for VELUX America Inc. "Having different standards has been
confusing to consumers. ENERGY STAR has become a recognized brand
to the consumer and has proven to be the best standard available,"
LeBrun adds that VELUX would prefer to see the new criteria apply
retroactively to 2010 ENERGY STAR qualified skylights bought by
residential customers anytime after June 1, 2009.
"Many of the buyers who chose to proceed with 'full-price'
efficient skylights, even though they did not expect a tax credit,
deserve the same benefit as those who replaced older windows and
doors with qualifying options available to them," LeBrun says.
Will Confusion Arise?
Although many in the industry agree that the legislation is a step
in the right direction, some also say it likely will create more
confusion in the marketplace.
"Some in the industry have told me recently that they weren't
sure they should do anything," says Jackson. "They're
worried that by the time their products reach the market they will
be obsolete. I know some manufacturers who literally just received
their .30/.30 results and now they will hear that competitors who
stuck to their original products can access the [tax credit] program."
He says manufacturers are now uncertain as to what their real target
should be. Jackson encourages manufacturers not to waste time and
look down the road two to three years and determine what their thermal
performance should be.
Another challenge will be getting the correct information regarding
this possible new legislation down the supply chain. Some are still
confused as to what products meet .30/.30 and now they may have
new changes to convey to the customer.
"That whole line of communication is strained," says Jackson.
"The leaders will be those who find a way to communicate down
the chain as far as dealers/contractors."
Need more info and analysis about the issues?
HERE to subscribe to USGlass magazine.