February 22nd, 2018
The Energy Star Program: Will You Pay to Play?
DWM published an informative article last week about the 2019 White House budget plan and its implications for the Energy Star program. If this plan passes, Energy Star would become a “pay-to-play” or “PTP” program. This means that manufacturers would be charged a fee to participate. There would be $46 million allocated prior to the PTP fees being applied.
So the question I am posing to my window and door manufacturing contacts is simple – “Will you pay to play?”
I designed a simple survey for my customers designed to answer a few simple questions. Would you pay to play? If so, how much? If not, what do you feel the impact would be on our industry and your business if we no longer have the Energy Star Program?
Preliminary results indicate nearly a 50-50 split. Half of my customers are saying that they would participate in a PTP program and half would not. Half feel that if we lost Energy Star it would hurt the door and window industry, at least in the short run. But so far, most people in this latter segment feel that in the long run, companies would find ways to beef up their own marketing campaigns to overcome any negative effect associated with the loss of Energy Star.
So what would the fee structure look like? Would it be a fixed amount regardless of the size of the manufacturer? Or would it be calculated as some percentage of overall annual sales? So far, results are heavily in favor of the former as opposed to a percentage-of-sales approach. But how high would the fixed fee need to be to effectively close the gap? And would this approach penalize smaller manufacturers for which the fixed fee would represent a disproportionate percentage of their overall sales?
At this point, there are so many details of a PTP program that would have to be worked out.
The key question that remains is this, “If the majority of the door and window industry chooses to reject a PTP program, and Energy Star does not survive, what overall effect will this have on the growth of the window and door industry?”
But even if the impact on industry growth is short-term, what would be the overall impact in the eyes of the consumer? As one survey respondent put it, “An independent, federally-managed Energy Star program establishes a level playing field in the eyes of the consumer. If it goes away, I’m afraid that our industry will slip back into the old smoke & mirror days when dealers could easily mislead homeowners with exaggerated claims or outright lies just to make a sale. It took us a long time to shake off that stigma, and I’d hate to see it return!”
The survey is still active, so click on this survey link to participate. Your responses will be anonymous.