Should We Look at HomeStar Again?

John G. Swanson
February 7, 2011
THE TALK... | Segments, Markets & Trends

Personally, I thought HomeStar was dead.  And given our current Congress, it may be, but President Obama brought it up again last week. Re-emphasizing his commitment to energy efficiency, he said would push for the initiative as part of his his next proposed budget. 

I know there are a lot mixed industry feelings on HomeStar.  Some people like the idea of incentivizing homeowners for energy efficient upgrades. Like the tax credits of the past two years, such a program would boost employment in the short term and help make our country greener and less dependent on foreign oil in the long term. 

Some have questions about the HomeStar program–saying the rebate program is too bureaucratic and will favor big players over independents. Many also just think the government should get out of the incentives business and stop spending money it doesn't have. Perhaps it's beating a dead horse, but is HomeStar something the industry should rally around and promote? That's our poll question of the week.  

And, as usual, I'd like to hear your thoughts on the matter. Obama's Better Building Initiative is getting some positive response from those in the commercial market. If you think incentives are good, but don't like HomeStar, how could it be improved? If, after two years of tax credits, you think the industry would be better off without any more government programs, let me know that too. Email me or post your thoughts below.

Survey Results as of 02/15/2011:

Should the industry lobby for HomeStar in 2011?










Yes, if it can be changed.




This week’s poll results, and most the comments received, confirms the industry’s skepticism about Home Star. More than half our respondents said they didn’t think the industry should lobby for the government program.

Wayne Gorell of Gorell Windows & Doors probably sums up the attitude of many:

“I think from your survey results I join most of our industry, and most other business people, in thinking it's time for the government to just get out of the way. No more stimulus, no more incentives, and please-please-please, no more regulations. I have seen more things to worry about and try to understand from the federal government in the last two years than I have had to deal with in the prior 38 years I've been in this industry.

“Enough, let's get back to business as usual this year all on our own.”

Still, there is industry support for Home Star—or at least its goals. The Window & Door Manufacturers Association issued its 2011 National Policy Agenda this week. It doesn’t cite Home Star specifically, but it does see a role for government encouragement of energy efficiency. In the introductory letter to the document, Steve Sisson, WDMA chair and VP/GM of Karona Inc., says, “WDMA and our members believe incentives to spur consumer purchases of more energy-efficient windows, doors and skylights are a powerful tool to both reduce our nation’s energy use and spur job creation. We estimate that there are nearly one billion single-pane windows in existing housing stock; a national energy policy that includes energy efficiency targets should reflect the gains that would be realized by replacing those windows with more efficient products.”

I personally think the industry and many individuals within the industry are divided by two conflicting philosophies. First, we have the Wayne Gorell’s sentiments about getting government “out of the way.” There is no doubt in my mind that most executives in our industry share his general concern about government programs and their costs versus the potential benefits. 

However, we are also very committed to our products. We know how energy efficient they are and how beneficial they can be not only to individual customers, but our country as a whole. It’s hard not to think the government should somehow encourage the deployment of more energy efficient products. 

The following email from Dan Higgins, trade and commercial business manager at Pella Corp. captures both sides of this equation:

“Generally I am for any initiative aimed at as you say ‘making our country greener’ but I think the Home Star approach is only a cog in the wheel. We need comprehensive energy reform that unfortunately seems politically unviable. Home Star and the myriad of other initiatives floated today and in the recent past will help on a number of fronts including spurring energy efficient improvements, maintaining (possibly growing) manufacturing jobs, creating new start-ups that target the energy improvement market, and fostering a whole cottage industry for ‘auditors.’ All of these are potentially good things in the near term, but in my opinion this is a band aid approach – we need a triple bypass.

If our government could get passed trying to get re-elected at every turn and tackle the central issue – how do we wean ourselves off of foreign oil in an economically responsible way – we could make real reforms that matter. Maybe Home Star is a part of that maybe it isn’t. The economists would have to figure out the costs associated with such an undertaking and determine the federal/private investment required to get there. I know this - we cannot keep adding massive government programs and then providing tax incentives at every turn – it is not sustainable. We are broke. And this is where my rub is with this type of program: it sounds good, plays well in the town hall meetings, drives economies, etc., but it also likely delays the real tough conversation we need to have about our foreign oil addiction. (I have deployed to the Middle East three times in my Active and Reserve Army career and can say unequivocally that I was there to protect our economic interests in that region (READ: Oil). The sooner we can end that dependence the better.)

As for Home Star specifically, from my little perch here at Pella, no question it would drive some business. And it will continue to force the industry to improve the energy efficiency of products–a good thing (for us something we do every day anyway). If Home Star helps advance the rest of the energy conversation, I am for it, but if it serves as a politically cute “see, we are green” slogan and prevents more rigorous reforms I’ll pass. I’ll take my chances on selling Pella head to head against anyone without the added energy stimulus.

Personally, I share the view that Home Star could potentially be good for the country. We need to reduce our dependence on foreign oil and efforts to improve energy efficiency could take us a long way on that front. I am also very sympathetic to the main reasons to be skeptical about Home Star. First, as a nation we cannot afford to continue piling up government debt. Second, there’s the red tape in the Home Star plan itself. The rebate system may end up being too complicated for homeowners and/or create an unlevel playing field for different types of window and door companies.

One thing we learned over the past few years is that we should pay attention and work to influence what’s happening in Washington. Between the tax credits in the stimulus package and the lead paint rules, we had our share of surprises. Whether it’s Home Star or some other program, whether we are for it or against it, we all need to be proactive—like WDMA with its policy agenda—going forward.

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I have been strongly against HomeStar since the first time I heard of it. The provisions, as proposed, would have killed the small mom & pop dealers in favor of the Big Box Store.  

This is what happens when gov tries to "fix the problem".   They did the same thing when they tried to fix the "mortgage problem". They propped up the very people that caused the problem at the expense of the small mortgage brokers.  

As Mr Gorrell very well put, let's handle this "on our own".   

Roy Cooper  Superior Windows & Doors  Medford & Ashland, Oregon

I have to agree with the previous comments. One concept that I would like to see discussion on, is instead of a tax credit, a low interest loan for any home improvement project, especially green projects. Tie the loan to the property tax so that even real estate investors or short term property owners are encouraged to invest in the properties. The loan could be long term making for low monthly payments, while interest is paid back to the tax payers.

It is so sad to see our government resort to short term tricks like tax credits to try to boost our economy when we know that it disturbs the long term viability of our industry.  What makes it morally correct to allow all taxpayers to subsidize the purchasers of window, automobiles and other items.  Doing so in good times is bad enough but doing so in times like these with record defecits will only burden our children and grandchildren for decades to come. 

I have seen and been a part of the roller coaster ride that was created by the government's "intervention" in the form of "incentives" and regulations. The spikes and valleys that have been created by such programs has been and (in my opinion) will continue to be devistating to business and this country. I continue to see money being bled out of our country only to the benefit of a few and the detriment of many. I would just as soon see things naturally settle to their base. The way that cash flow has dried up this first quarter as everyone scrambled to "get in on the deal" in the last quarter of 2010, has caused many companies to give up the fight. We are all weary from the economic crisis and giving false hope does not help anyone. This economy is just as much a mental fight as it is a fiscal battle and using incentives as you would a drug to "soothe the pain" only creates a country of governmental addicts.... Well... that's my two cents worth!

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