Should Tax Credits Be Tied to Energy Star?

John G. Swanson
October 26, 2009
THE TALK... | Codes & Standards

Survey Results for 10/28/2009:

Do you support the new Senate bill tying window tax credits to Energy Star?









Two out of three respondents to last week's poll think homeowners should be able to get tax credits for purchasing Energy Star-qualified windows, doors and skylights, as opposed to the .30/.30 requirements set forth in the American Recovery and Reinvestment Act. That's no surprise. Ever since the tax credit numbers came out, I've been hearing complaints about the one-size-fits-all approach that was taken.

"The .30/.30 rule unfairly penalized the Northern climate zones of the U.S. I have run simulations using Resfen and found that the result for our average customer was a minor decrease in air conditioning bills with an increase in heating bills of about $100 annually," writes David Paulus, director of engineering at Wasco Windows in Milwaukee, Wis.

"I cannot claim that the stimulus bill has not helped our sales," he continues. "It was simple to meet .30/.30 simply with a change of glass, and a 30 percent tax credit outweighs the increased energy consumption. However, I doubt that the intent of the bill was to mandate less energy efficient windows for the Northern climate zone.

"As a local manufacturer, Wasco always has taken pride in tuning our window performance to our climate in Wisconsin. The .30/.30 provisions made this impossible," Paulus notes. "The only beneficiaries of the .30/.30 rule (as opposed to linking tax credits to Energy Star) were large, national manufacturers who do not want to be bothered with outfitting their windows specifically for the climate in which they will be used. A change back to Energy Star will greatly benefit consumers."

Still some see the more aggressive numbers of the stimulus package as a net positive. "The .30/.30 requirement for the tax credits has forced consumers to install windows and doors that are superior insulators saving them and our country energy. We changed our double glazed recipe last November for the sole reason to be better than our nationwide competitor down the street and were superior to the .30/.30 before it became needed,"  writes Jerry Hartman of Gilkey Window Co. in Cincinnati.  He shares the concerns about regional appropriateness, but suggests the benefits ot the program outweigh those limitations.

"We have built windows for 15 years that have beaten the .30/.30. We accomplish this without dropping SHGC down to .21 or .19 blocking out light," Hartman states. "The way most companies have qualified is to provide glass that is suitable for Miami, Fla.; the problem being most windows are being installed much farther north than that. We have enjoyed our competitive advantage yet will concede that the .30/.30 is not the product to use in the colder Northern climates; what about the age old augments about net solar gain? Our argument is though; we have offered total U factors of .21 (or better) & SHGC of .25 for 15 years, why did not the rest of the industry care enough about our country, our energy independence, or the consumer to develop products that would really have made a difference?

"When I was touring Unilux, a window that we import from Trier Germany, sash were brought in to be rebuilt that were over 200 years old; every week we replace windows that are not yet 10 years old," Hartman concludes. "Sorry for the preaching, we have windows to sell and a countries’ energy independence to save."

It's interesting to note that one of the reasons the .30/.30 requirements were chosen was to limit the cost of the tax credit program to the government by keeping the number of qualifying window, door and skylight purchases down somewhat.  I personally have some doubts that it worked on that front, because my guess is that the vast majority of window and door manufacturers that weren't making a qualifying product started making and promoting them. That might have been part of the plan too, but the vast majority of window and door manufacturers were also waiting to see what the 2010 Energy Star criteria would be and would have gotten there once they knew the numbers.

I don't know enough about Washington to know whether or not the Senate bill that would change the tax credit requirements to Energy Star has a chance or not.  I have reservations about the one-size-fits-all approach that was taken. I especially don't like how the decision to use those numbers was made in the wee hours of the night. 

At this point, however, I have reservations about how much energy should be put into lobbying for the change.  The tax credits expire at the end of 2010.  Yes, a few more manufacturers might be able to qualify their products and some houses might get more appropriate windows, but other issues may derserve even greater attention.  DOE's push to R-5 is a pretty good indicator to me of where Energy Star may be going in the not-too-distant future. We have new EPA lead paint regulations that are going to impact many dealers and manufacturers in the replacement market next year. And we may want the stimulus tax credits extended if our markets are still looking weak toward the end of next year.

We may want to invest our lobbying time and energy elsewhere.   

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