Tax Credits: The End of an Era

March 3rd, 2014 by DWM Magazine

No doubt federal tax credits were in place at a time when the fenestration industry needed a shot in the arm. As an industry we saw the greatest benefits in 2009 and 2010 under the influence of the ARRA Stimulus plan. However, when you put a Band-Aid on a scratch, you don’t expect that you can leave it there forever.

Likewise, the level of that rebate program was not practical or sustainable. Thankfully, when it was time for the federal government to remove the tax incentive bandage, it took a slower approach rather than ripping it off all at once.

After 2010 we saw federal tax credits drop to pre ARRA incentive levels but not eliminated, giving us time to adapt to the new realities of doing business. As of December 31, 2013, we entered into a new federal-tax-incentive-free era when 25C became a footnote in the history books. And it could be a long, long time before we see anything like it again – if ever. So where does that leave us?

Adapting to the Times

No one can argue that the 2009-2014 “healing phase” caused some of the most rapid changes in the history of fenestration. Our businesses look nothing like they did pre-2009, driven by increasingly stringent energy standards and the rise of consumer power via the Internet. To stay afloat, companies had to re-think their product designs and the way they marketed those products.

Like everything else around us, financial incentives for consumers and building owners have evolved. Where the federal government has dropped off, state and local authorities, as well as utilities, have picked up. There are still more than 1,800 programs available for energy-efficient upgrades – you just have to work a little harder to find them.

A great example is the Ashland Electric Utility in Oregon that offers rebates of up to $6 per square foot of window area when replaced with Energy Star® windows having a U-value of 0.30 or lower. That program is a great value to consumers. Many, many other examples like this exist. And most of them have some sort of Energy Star requirement attached to them.

On the marketing front, we are no longer able to rely on the mass media to educate our consumers about incentives available at the national level. Instead, we have to educate ourselves and our customers on what’s available locally. If you have not spent time on the Database of State Incentives for Renewables & Efficiency (DSIRE™) website, I urge you to do so right away. It’s the best resource that I’ve found for identifying all of the incentives available in your area.

Everyone Wants the Same Thing

To many of us, it feels like we are getting pulled in a thousand directions by consumers, legislators (state, federal and local), and perhaps our dealer networks. In reality, they all want the same thing: more efficient products. More specifically, Energy Star-rated products.

“The View from Here” is we must continue to adapt and build products that meet the needs of our stakeholders to stay relevant. And if you aren’t telling your local market about the incentives available to them, you could be losing lucrative opportunities.

Are you using local incentives to market your energy-efficient products? Leave a comment here or contact me directly at eric.jackson@quanex.com.

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