Stimulus Package: It’s Raining Rebates

If you want great press and lots of it, just give away money. For the remodeling industry, the press and Web coverage of The Stim can be summarized this way: The feds are making it slightly less expensive for people to remodel their homes by giving them rebates in the form of tax credits.

What’s more, the Stimulus Bill, a.k.a. the American Recovery and Reinvestment Act of 2009, isn’t the only program out there. At press time, the Cash for Caulkers (Home Star) program — a proposed $6 billion effort — is getting serious consideration. Plus, there are state and federal programs from weatherization that account for hundreds of millions more.

Savvy remodelers — like you, I hope — should really be advertising the availability of these consumer tax credits to move prospects off the dime to engage your services.

An Overview

Here’s a brief overview of the Stimulus tax credits. There are three types of home improvement products eligible for tax credits:

1) Home-shell improvements (insulation, windows and sealing)
2) Home heating, ventilating, and HVAC (efficient air-conditioners and furnaces).
3) Renewable energy technology (geothermal heat pumps, solar water heating, small wind generators and photovoltaic/PV systems.)

Timing. The tax credits for the home shell and HVAC are available if homeowners make purchases before Dec. 31, 2010. Investments in renewable energy technology are eligible for credit until Dec. 31, 2016.

How much. With the Stimulus Bill, the Existing Homes Tax Credit increases from 10 to 30 percent of the cost of energy-efficient windows, HVAC equipment and insulation, up to $1,500 per qualifying household through 2010. (For building-envelope improvements, the 30 percent homeowner tax credit applies only to the cost of the components. But for energy equipment, installation costs are also eligible.)

Note: The tax credit for homeowners is not cumulative across product categories. That $1,500 is the maximum total amount that can be claimed for all products purchased in 2010.

Not all products are eligible. Qualifying standards for eligible products have been raised, and not all Energy Star-rated windows are eligible. For example, only windows with a U-value and solar heat gain coefficient (SHGC) of 0.30 or less qualify for the credit.

No electric water heaters tankless or storage qualify.

Builder credit. The Stimulus Bill makes no change to the $2,000 home builder tax credit for homes that exceed — by 50 percent — standards set by the 2004 International Energy Conservation Code (IECC) for insulation, heating and cooling. Owners or designers of commercial buildings can claim a tax deduction of up to $1.80 per sq. ft.

More info. There are plenty of Web resources. Start at Recovery.org, a private effort, that has more information than even the official Recovery.gov site. Another fabulous site is DSIRE (www.dsireusa.org), a superb incentive summary website. State energy programs can be found at this link with an interactive map: http://apps1.eere.energy.gov/wip/sep.cfm. And there’s a Department of Energy Recovery Act Clearinghouse to answer your questions: (888) DOE-RCVY (888-363-7289). For a list of programs by state, visit http://www.energy.gov/recovery/index.htm. NAHB also has a strong Stimulus Bill page at http://www.nahb.org/generic.aspx?genericContentID=113316.

The Case for Stim: Tankless Water Heaters

The Stimulus tax credits are fairly selective about what products are eligible. Don’t just snap up an Energy Star product, hand over the receipts, and assume your clients will get the tax rebate. To show you how careful you must be to select products that qualify, let’s look at tankless water heaters. First, note that there is no tax credit for conventional electric storage water heaters or electric tankless water heaters. For a tankless water heater to qualify, it must have an energy factor of at least a 0.82 or thermal efficiency of 90 percent. That said, the tax credit can apply to any propane or natural gas heater that meets the efficiency test. But to qualify, the unit must be installed in your client’s primary place of residence. Not a vacation home. Not a guest or rental unit. For the unit you purchase, be sure to obtain (or show your clients how to obtain) the Manufacturer Certification Statement (see a sample of this Statement from Dow at this link: http://www.dow.com/PublishedLiterature/dh_02d4/0901b803802d4209.pdf?filepath=styrofoam/pdfs/noreg/179-07341.pdf&fromPage=GetDoc

Phew. Like any federal program, it has its bureaucracy, but in the end it’s real money.

Loading