October 19th, 2015
The State of Energy Efficiency Incentives
When marketed correctly, incentives for energy-efficient home improvements have the power to move consumers off the fence and into buying mode. We’ve seen them do wonders in the past for our industry, but what does the future hold?
On the federal level, residential tax credits are difficult to predict year-to-year with decisions being made by Congress almost annually. Even still, the credits have been modest compared to what we’ve seen historically. But that doesn’t mean useful, business-boosting incentives aren’t out there. You just have to look a little closer to home to find them.
Federal government encourages state-level incentives.
In January 2015, the DOE’s Office of Energy Efficiency and Renewable Energy’s (EERE’s) State Energy Program (SEP) offered up to $5 million in grants to U.S. states that develop innovative approaches and solutions to boosting energy efficiency and renewable energy.
It is estimated that for every dollar the federal government contributes to SEP, there is an average ROI of $7.23 saved from reduced energy bills. This takes into consideration that states will also kick in their own funds to make the most of programs.
With such a high rate of return, it’s more likely that the federal government will rely on states to implement their own incentives while offering assistance in the form of grants like this. We could still see modest tax breaks at the federal level, but you are better off keeping up to date on what’s happening in your own state.
Finding incentives in your area.
The View from Here is that it’s imperative for door and window manufacturers and dealers not only stay to apprised of what’s happening locally, but also to work toward educating and promoting these incentives to consumers. I’m hopeful that the DOE will also release the numbers on how much consumers can expect to save by investing in energy efficiency from programs such as SEP. I’ll have more to come on that later.
Meanwhile, if you have not spent time on the Database of State Incentives for Renewables and 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. You can also visit the SEP Solution Center for more federally backed programs.
It is worth noting that the eleven states awarded funds under SEP this year were Maine, New York, Tennessee (two grants), Virginia, Alaska, Minnesota, Missouri, Nebraska, New Hampshire, New Mexico and Vermont. Get the details.
What’s your View on incentives? Email me directly at Eric.Jackson@Quanex.com.