Energy Star at Risk

A snapshot of the looming fate of the Energy Star program
Kelly Smith
June 27, 2017
FEATURE ARTICLE | Markets & Trends
Many manufacturers make energy efficient products but can’t justify the costs associated with labeling. (Image courtesy of Energi Fenestration Solutions, energifenestration.com)

For the many residential window and door manufacturers that comprise the fenestration industry, Energy Star has been a way of life since 1992. Now, that program may be substantially changing or going away completely.

The 2018 preliminary federal budget proposal that was released in March includes the possible elimination of the Energy Star program, as part of a 31 percent cut to the Environmental Protection Agency, which sponsors Energy Star.

A final budget proposal (unavailable at press time) was expected in May 2017, with more specifics to potentially be presented at that time. However, the proposal has already generated attention in the industry.

INDUSTRY RESPONSE

The Energy Star program appears to have strong support in the fenestration industry as well as outside businesses. An April 24 letter to Congress from the Alliance to Save Energy calling for lawmakers to strengthen rather than eliminate the program, was signed by more than 1,000 U.S. companies and organizations, including a number of fenestration business leaders.

“Energy Star is a model for successful collaboration between the public and private sectors,” the letter states. “It enjoys a long track record of success and should be strengthened, not weakened, to ensure it continues providing these important benefits to the public while helping us meet our energy and environmental goals.”

But what if such appeals do not have an impact on the fate of the program? “My sense is that, on the surface, the industry might not look all that different without Energy Star. Vinyl window and door systems are now ubiquitous and have dominated market share in recent years within new residential and multifamily construction,” writes Eric Thompson, Quanex Building Products, in a recent Talk on windowanddoor.com. “Would the elimination of Energy Star change that?”

The energy performance of the triple pane A-Series by Andersen Windows meets or exceeds Energy Star v6 requirements for climate zones in both the United States and Canada. (Image courtesy of Andersen Windows, andersenwindows.com)

Likely not, he opines: “Vinyl windows and doors are chosen by homeowners and builders for a lot of reasons including energy efficiency, even if there are no government incentives on the table.”

Thompson discussed the fact that other market forces are at work to create performance standards in residential windows, most notably, as he says, the “widespread adoption of variations of the International Building Code and International Energy Conservation Code, along with guidelines published by independent associations and organizations that offer what we might call a “safety net” of minimum allowable performance in residential windows. The elimination of Energy Star does not, in itself, open the floodgates for poorly-performing vinyl windows.”

He continues, “I don’t think the elimination of Energy Star will have immediate, major effects on the residential window and door market. But does that mean the program’s shuttering is a positive? Certainly not for the upper end of the market—and on a long term basis, the changes would be difficult to predict.”

BY THE NUMBERS

Launched under President George H.W. Bush, Energy Star is a voluntary program that connects the public and private sectors to foster energy efficiency in products, homes and businesses nationwide.

More than 16,000 partner companies and organizations participate in the program; the blue Energy Star logo has an estimated 85 percent brand recognition. Energy Star costs about $50 million per year to administer, with economic savings in terms of reduced energy costs of more than $30 billion annually, and a cumulative savings to date of $362 billion.

The administration’s preliminary budget proposes cutting the EPA's budget from $8.3 billion in fiscal year 2017 to $5.7 billion in fiscal year 2018. As part of that cut, the administration would eliminate funding for Energy Star and instructed the EPA to “begin developing legislative options and associated groundwork for transferring ownership and implementation of Energy Star to a non-governmental entity,” according to a draft budget.

Dennis Krueger, vice president and general manager at Lincoln Windows, agrees with this assessment that eliminating the program would not dramatically change the window industry. However, he makes the point that it may allow more windows in the market and significant dollar savings for the manufacturers that can’t justify the costs associated with labeling, such as listing every glass option, internal grill option, etc.

Krueger turns the conversation to the actual notion behind Energy Star: energy and cost savings for consumers. “Additional research should be done to determine what the energy savings would be based on U values. For example, if you have to pay 10 or even 20 percent more to get a window that has a U value of .28 versus a window that has a U value of .30 what would the payback be to a consumer? This is the angle that should be taken when looking at this matter,” he says.

WHAT’S NEXT

Unpredictability and uncertainty appear to be at the heart of the situation at this point. One industry insider that weighed in on the issue is Jeff Inks, senior vice president of advocacy at the Window and Door Manufacturers Association of America. He discussed the WDMA’s position on the change, the budget approval process, and his advice to those in the industry.

The elimination of Energy Star “is going to be easier said than done,” Inks relates. “We are not supportive of moving it to the private sector, or having it moved to state control. It would be a disservice to manufacturers and consumers alike, not just from the perspective of fenestration products, but all products that participate in the Energy Star program.”

Of the present situation and the anticipated timeline, he says, “The final proposed budget is due out in May; it’s been extremely frustrating to try to get any information. The agencies are lacking appointments of the senior-level professionals, so we don’t know how those agencies are dealing with that, in terms of what they are doing in consideration of their budget.”

In terms of what to expect when the final budget is presented, Inks says that the Energy Star program is not an appropriation; “so we don’t know in what form that de-funding would come. We may see that EPA funds are not to be expended on the Energy Star program, we don’t know that.”

The Lincoln Fit Double Hung by Lincoln Windows offers glazing options tailored for different projects and geographical locations, but doesn’t have the Energy Star label. (Image courtesy of Lincoln Windows, lincolnwindows.com)

STAY THE COURSE

The budget approval process could stretch well into the summer and beyond, meaning the uncertainty about the future of the program isn’t going away anytime soon. “Once we see a formal proposed budget, that’s when the games truly begin,” Inks says. “One thing we can be encouraged by is the fact that support for the Energy Star program has been great, and that has been bipartisan. It is truly one of the best examples of a quality, credible, cost-effective federal program that benefits everybody.”

Given the uncertainty of the timing or knowledge of the details of the proposal, what should manufacturers, dealers, and consumers do? “Nothing—as an ES partner, I would change nothing to what I do right now,” says Inks.

More will be known about the fate of Energy Star when the final budget proposal is released. At that time, the administration’s plan for the program will be known, and the government budget process will begin in earnest. Until then, it’s prudent for manufacturers, dealers and others in the fenestration industry to stay the course in their day-to-day business events.

Kelly Smith is senior editor of Window & Door magazine. Contact her at ksmith@glass.org.