How the 25E Performance Tax Credit Can Help the Industry

Jeff Kaliner
October 15, 2012
THE TALK... | Energy Efficiency, Segments, Markets & Trends

It’s no surprise government tax credits for residential energy efficiency upgrades are a boost to the home renovation industry. The recent federal tax credit for windows and doors, where homeowners could claim a portion of their purchase of energy-efficient windows, doors and skylights, coupled with the trend for homeowners to stay put and fix up their current residence due to a lagging housing market, helped consumers feel more confident to invest in their homes again.

Even now as 2012 comes to a close, consumer confidence continues to be marred by the stinging memory of 2008, and homeowners are looking to get the most bang for their buck when it comes to home improvement projects. The promised return on investment of lower utility bills and increased resale value that accompanies popular energy efficient upgrades instantly puts these projects at the top of a homeowner’s priority list.

Currently part of a number of bills before Congress, the 25E Residential Performance Tax Credit would be revolutionary because it wouldl be the first time the effectiveness of energy efficient home improvements can be measured. To qualify for the credit, taxpayers must enlist a Building Performance Institute-accredited company or a Residential Energy Network (RESNET) certified Energy Smart Home Performance Team to establish the baseline energy use of the home.

After an energy-efficiency plan is in place to give the home an airtight seal to reduce energy purging, the home’s energy use will be measured again and compared to the initial baseline measurement. The ensuing tax credit will then be based on the percentage that energy use from heating, cooling and hot water is reduced, up to $5,000 or 30 percent of the total job cost for the installed measures.

With the full implementation of 25E, homeowners will see the drastic impact of energy efficient upgrades in black and white for the first time. Instead of deciding to embark on green projects solely based on a hope that utility bills will be lowered or a feeling of being environmentally conscious, we’ll have concrete, undisputable proof of the effectiveness of these projects in achieving energy efficiency in the home. This evidence acts as a revolutionary proof point for our business as we look to the future of the home improvement industry.

Government policy is at the forefront of daily conversation across the country as we’re a few short weeks from the presidential election, so let’s reinvigorate the conversation around this and other tax credits and policies that can help boost our industry. How do you see the 25E Performance Tax Credit helping the industry?

Jeff Kaliner is a founding partner of Power Home Remodeling Group, the nation’s fourth largest home remodeling company with more than 1,200 employees and $135 million in annual sales. Power provides windows, doors and other exterior remodeling products to homeowners in Pennsylvania, New Jersey, New York, Maryland, Washington D.C., Virginia, Delaware, Connecticut, Massachusetts, New Hampshire and Georgia. Started in 1992, Power is a past Window & Door Dealer of the Year, as well as an Inc. 5000 company. Having served more than 50,000 homeowners, the company has also been recognized as a "Top Workplace" by The Philadelphia Inquirer.

Comments reserves the right to delete any comments. Read our Comment Guidelines for more information. Report comments you find offensive or believe violate our Content Guidelines.

I'm sure the industry and consumers would welcome this. Is there a significant cost for the RESNET evaluation?
How is the before and after measured?