Plavecsky's Ponderings By Jim Plavecsky
by Jim Plavecsky
February 24th, 2009

The Recovery Plan to the Rescue? Great News But You Better Move Fast!

It looks like the stimulus bill which was just signed is both good news and shocking news for the window industry! The good news is what the bill calls “clean energy investments.” New windows, both residential and commercial, will be a big part of the plan. The White House plan calls for an investment in “weatherization.” The return on this investment will be the annual savings that will be earned by reducing heating and air conditioning bills. Advocates of this plan are really excited because these savings are not just a one time boost to the economy, like a one time tax credit. Instead, these savings keep adding up year after year, providing a cumulative boost to the economy. The White House estimates that the average family would save $350 per year on heating and air conditioning costs after “weatherizing.” The efficiency elements of the plan are designed to put people to work quickly (many in the window industry) and put money into the pockets of people who pay heating or air conditioning bills every month.

However, one key element of the stimulus bill that has many in the window industry in shock is the provision for a tax credit that will be provided to homeowners installing energy-efficient window, door and skylight upgrades. The bill rewards the homeowner with a tax credit of 30 percent of the cost of the qualifying upgrades (up to a $1500 maximum), but to qualify, the homeowner must install products with a u-factor of .30 or below and a SHGC also of .30 or below! What’s got everybody in the window industry reeling is that the Obama bill just took ENERGY STAR and threw it out the window! The whole idea of having six zones tailored for specific geographic latitudes seems rather meaningless now as homeowners will be fixated on the .30 and the .30! Many window manufacturers are now scrambling to see how they can possibly meet these new “generalized” requirements or they will face competing at a considerable disadvantage in the marketplace, where the possibility of a 30 percent tax credit will surely weigh heavily in many buying decisions!

Once again, the whole idea of the plan is to “weatherize” the country, which will result in energy savings for the nation as a whole. “Those savings keep adding up, year after year,” said Nathan Hultman of the University of Maryland School of Public Policy. “Arguably, it’s better than any other rate of return you can get in the economy,” he said. “The spending on weatherization would create jobs quickly,” Hultman said, “because there’s no need to invent anything; the materials and skills are readily available.” The bill sets aside $5 billion to improve energy savings in more than 1 million modest-income homes and about $4.5 billion to weatherize federal office buildings. “Weatherizing buildings across the United States offers an easy, relatively cheap way to put people to work and cut energy consumption and costs,” said Phil Angelides, the chairman of the Apollo Alliance Board of Directors. The Apollo Alliance is an organized group of business, labor, environmental and community leaders who are working to create a “clean energy revolution” in America. Their goals are threefold: reduce our dependence on foreign oil; cut carbon emissions that are hurting our environment; and expand business opportunities with jobs in the clean energy sector.

While the fenestration industry is currently in a downturn, we are also at a major turning point, and we are about to head into a new era filled with major opportunities. It is time for door and window manufacturers to make sure they are positioning themselves to take full advantage of this renewed focal point on energy! Based upon 2008 census data, there are approximately 112 million households in America, and roughly 50 percent of these still have single-pane glass! Given the fact that energy-efficient dual-pane windows with low-E glass can reduce overall heating and cooling costs between 34-38 percent, the government and energy conscious groups such as the Apollo Alliance are definitely going to be pushing for more programs that will move America in that direction! The demand curve for our nation’s energy usage has been steadily rising whereas the supply curve has been flat. Since the gap between supply and demand has been widening, we need to narrow and possibly eliminate this disparity in order to get energy costs under control.

New, energy-efficient windows can, in a sense, can be considered a source of clean energy since they help to flatten the energy demand curve, with the added benefit of providing ongoing dollar savings on energy bills that can then be pumped back into the economy to help create an upswing in that one special curve that we really want to see rising -GNP !!

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2 comments
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  1. The winners in this bill are homeowners that put off buying new windows until now, and the contractors that have access to a qualifying window!

    We as a company are in a good position to double or triple or business this year. Since we developed our new window line in 2001, we’ve been able to offer windows that have exceeded the new “demands” placed on non-qualifying manufacturers. Our 0.27 U-Factor & 0.30 SHGC will allow us to reap even more new customers. We’ve also seen a big increase in the demand for triple glazing in the last 2 years.

    My concern however is that this bill could cripple even more fabricators throughout the country. We’ve already lost over 60 fabricators since October.

    I find it ironic that the government had to go to such “extremes” to bribe people to save energy.
    Would $200 to a $500 credit have been enough?

    While I love the $1500 credit, I know my great grandchildren will be paying off our national debt!

    Don Jacobson

    Windows By Unlimited
    Oak Creek, WI

  2. We have certainly had our share of unusual events since October. With many fabricators forced to close their doors, the remaining ones should survive thanks to the new tax credits.

    However, this new tax credit requires education to the contractors who will be selling and installing these windows.

    Keep in mind, it’s 30% of the cost of the windows up to a maximum of $1,500 per home. (Not 30% of their contract amount!)
    I can’t help but see confusion at tax time for many of the ultimate purchasers of these products.

    While many remodelers are still looking for work, this is the perfect time of year for this exciting program.
    We have linked info on our website along with contacting all of our customers. If you are not educating, you are not going to see positive results!

    All signs point to a very profitable year!

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