Is the Market Confused?

John G. Swanson
May 5, 2009
THE TALK... | Codes & Standards

Survey Results as of 05/06/2009

Will the delay in implementing 30/30 criteria have an impact?

No, this will blow over quickly.

  

 

38%

Yes, we'll see short term confusion and the effects will linger on for some time.

  

 

32%

Yes, but only minor, short-term confusion.

  

 

30%

Like the 30/30 tax credit provisions themselves, the recent IRS decision to delay implementation of those requirements until June 1 has generated a mixed reaction from the industry. Our poll results suggest most people think the change to allow Energy Star labeled products through the end of this month will have little impact, some foresee short-term confusion in the market and others see potential repercussions.

Based on the written responses I received, it’s clear that some readers think the action is a positive for industry and some see it as a negative. I get a sense, however, that the feelings aren’t quite as strong either way—on this issue—as they were on the original legislation.

A vinyl window manufacturer wrote to say that the fact that the IRS has “grandfathered” in Energy Star products will have no real effect. “Most vinyl guys that didn’t have access to a qualifying product have gone out and gotten one,” he notes.

The impact of the IRS ruling will be short-lived, suggests Wayne Gorell of Gorell Windows & Doors in Pennsylvania. “The real key is that it has given the industry that didn't meet the standards—mainly the big new construction manufacturers—some time to adjust to the tougher requirements.”

“The ruling is very favorable to our industry and legally removes a huge hurdle...what to do with all those people who purchased Energy Star windows thinking they were buying the best and would receive the stimulus money—only to find that their Energy Star window did not qualify for the stimulus money,” says a representative from an extruder of vinyl window systems. He reports that there’s already been a suit in California brought against a company, charging “your salesman told me my windows would qualify and they don't.”

He says the .30 SHGC requirements eliminated windows produced in most markets north of the Mason Dixon line, including the much of Northeast, Upper Midwest and Mountain West. “No one in these markets was selling a window with a .30 SHGC so this ruling solves this dilemma. For my money, this decision is a great decision for our industry.” His only regret is it was not announced simultaneously with passage of the law. “Then all the fabricators recertifying to achieve .30/.30 would have know they had until June 1 and the process to re-run simulation could have been more orderly, with less panic, more efficiency and consequently less cost.”

“I don't see this being any issue for any of my customers. I have been honest with them about all of the changes and new information and they have accepted that,” reports Daniel J. Tracy of Norandex Distribution in Fenton, Mo. “It has been confusing and hard to keep every one of my window customers up to date on every change or new info. The window companies we distribute [companies omitted] all have made their tax credit glass packages more competitively priced. My customers are telling homeowners that they can qualify for the credit with the .35, but then asking them why they would not want a more energy efficient window for a little more money. It is an easy up sell for them now that the new standards are on paper. The homeowners that have paid for the 30/30 should not feel shortchanged at all. They have a superior energy efficient window. This change has finally opened the eyes of homeowners about the windows that are being installed in their homes. They are realizing that not every window is the same and the truck and ladder contractors who do not try to keep up with the times will be left in the dust.”

Not everyone in the industry sees the IRS ruling so favorably. “My customers who bought the 30/30 package got screwed,” says Nick Fry, a manufacturer and installer of windows based in California. “Yes, they got a better window but given a choice most would have paid the lower price and put the $1,500 in the bank. That would have been a real stimulus!”

The IRS ruling as “a step in the wrong direction,” according to David Kochendorfer, CEO of Thermo-Tech Windows in Minnesota. Many manufacturers, including his company, actually enhanced and certified products to meet or exceed the .30/.30 requirements. It is a benefit to the end consumer, he notes, but it represents an investment in time and money, he notes. “If manufacturers who do not meet the .30/.30 requirement worked to change their products as we did to be more energy efficient vs. lobbying to change the .30/.30 requirements, it would be in the best interest of all. It appears these organizations and lobbyists are very short sighted and are looking out for their personal interest only,” Kochendorfer writes. “This recent change has confused consumers and is giving the market a black eye.”

"First, they dumped the climate zone, which was scientifically designed so manufacturers can offer consumers energy efficient products based on their geographic location and an intelligent way to purchase window products that are energy efficient… BIG mistake to dump the climate zone model!" says Joel Cuccio, owner/president of American Jewel Window Systems in New Jersey. "Now they send out revisions with mixed messages that are conflicting with their recent stimulus plan, and offer no clear direction or comprehensive solution to a deeply flawed energy model for the window and door industry and the country. I agree with the concept of the stimulus plan! Good job! However, the execution of the details and the criteria of how window and door products qualify, is a slap in the face to the folks at Energy Star, the window and door industry, and the American consumer."

Other responses I received shared those concerns about the original 30/30 requirements are still there. “I am a Weather Shield window dealer here in Minneapolis, Minn., and most all of their windows meet the 30/30,” reports Greg Harvey of Modeen Co. “The only thing that was bad about the 30/30 was the solar heat gain at .30! We are in the most Northern region and we want the solar heat gain in the winter…..so I think Washington needs to use common sense when it comes up with these laws! I should know better to ask that Washington uses common sense.”

I’ve answered a number of calls from confused readers in the past two weeks, and generally, I would note, they share a common skepticism about Washington’s ability to handle tasks with much common sense.

Responding to the Talk, Wayne Gorell noted, “If the government can't even get something as simple as this right, I look forward to them running the car industry and the largest banks. I think the recession is over, but I am very worried about where we are going for the long term with the Congress and the Executive Branch becoming business managers.”

The federal government may not own a stake in a window or door company yet, but it’s clear Washington is going to have more to say about the products this industry manufactures and sells in the coming years. Based on reports that the 30/30 requirements have stimulated sales for many companies, that may not be all bad, but it sure looks like things will be more complicated.