The NEWS: DOE to Provide $7mil to 24 States to Update Energy Codes

If you've not seen this article from The NEWS, you need to. ARRA (the stimulus bill) provided the U.S. Department of Energy (DOE) with funds to use as a carrot and stick to states to adopt and enforce more stringent building energy codes (IECC for residential, ASHRAE 90.1 for commercial). For many states, and now 24 more, the time to debate whether the more stringent energy codes are reasonable, attainable, or justified has passed, and now it's up to our industry to figure out how to live with them (and not allow another California Title 24-ish disaster to occur). If you're not closely tied into your state(s)' energy offices, code officials, etc., you had better find a way to do so quickly...especially in these 24 states.

The Good, Bad, and Future of 25c Tax Credit Extension

It should not be minimized what a victory it was to have an extension of the 25c tax credit for residential energy efficiency improvements included in the tax bill that was signed into law last week. Just a few months ago most lawmakers knew little about 25c, and it was competing against a Rockefeller Center-sized Christmas tree of other tax provisions for inclusion in that bill. Congrats to HARDI's Manager of Government Affairs, Jon Melchi, ACCA's VP of Govt. Affairs, Charlie McCrudden, and Austin Primiano of Lennox International who tirelessly worked Washington and coordinated efforts over the last several months to secure this extension.

Unfortunately, an extension in today's political climate cost a reduction in the credit amount but I know HARDI will continue to work towards at return to the previous $1,500 credit level. As evidenced in this Columbus Dispatch article, the reduced level is causing a rush by many homeowners to get improvements and HVAC installations done before the full $1,500 credit expires next week. November and December are shaping up to be huge months for HVAC distributors and contractors, however we must look ahead to what could be a tough Q1 next year. 2011 will be about getting back to basics. A $500 credit is nice, but it won't create demand like $1,500 did so be prepared to use slow January and February to train and educate your people and put them in the best position possible for a grind-it-out 2011.

HARDI Launches Industry, Nation Wide Effort to Extend HVAC Tax Credits

HARDI launched today a new website, http://www.savehvacjobs.com/. The new site is for the entire HVAC industry to use to promote and facilitate an nation-wide grassroots movement to extend the expiring 25c, $1,500 residential tax credits for the installation of high efficiency HVAC systems. From this new website, HVAC contractors, distributors, manufacturers, manufacturer representatives, and service providers can quickly and easily personalize a pre-drafted letter or compose their own letter to their federal legislators urging the immediate extension of these important tax credits before they expire at the end of 2010.

HVAC businesses can also send their company name or logo to join@savehvacjobs.com to show their support for 25c extension. “Our goal is to have a page with so many HVAC company names and logos on it that the page appears to scroll forever,” said HARDI’s Executive Vice President & COO, Donald Frendberg. “The idea started with Riley Sales, a distributor member outside Philadelphia, PA, who had created an online petition for their employees and contractor customers to sign and send to their representatives calling for a tax credit extension. It was such a fantastic idea that we asked if we should do something similar on a national level.”

HARDI is encouraging all of its over 400 U.S. distributor member companies to show their support on the site and more importantly to urge all of their thousands contractor customers to use the site several times a week until their representatives get these tax credits extended. “We know from many testimonials which we’ll start to post on this new website soon that many HVAC distributor jobs were in fact saved or created by the sales boost this tax credit provided,” stated HARDI Vice President, Talbot Gee. “We can only imagine the positive employment impact the tax credits have had on the tens of thousands of professional contractors out there, and of course the manufacturers of the qualifying equipment. We hope this provides the industry with a central portal for companies of all types to come together and speak as one massive and loud unified voice until we get these tax credits extended.”

HARDI has repeatedly expressed serious concerns of a regression in 2011 of the modest recovery experienced so far in 2010 if the $1,500 tax credits are not extended before they expire this December. “New units still aren’t flying off the shelf like we hoped despite the heat and the tax credits this year, but the mix of high-efficiency units being installed is keeping a lot of HVAC businesses going these days,” said Gee. “I don’t want to think about a 2011 without the benefit of these tax credits so we’re urging every HVAC business to do everything they can in the next three months to help us get these tax credits extended.”

ACCA's McCrudden on 25c Extension: Couldn't Have Said it Better Myself

ACCA's VP of Govt. Affairs (and son of a HARDI distributor member owner) gets it and says it well in his latest blog post about the potential for extending the $1,500 25c tax credits. This is the time for urgency on this matter, and I just can't understand why there hasn't been more of it across the HVAC industry. A failure to extend these credits BEFORE they expire this year sets the table for rough 1Q 2011 for distributors, contractors, and manufacturers.

Wouldn't it be Nice to See These Everywhere Right Now?

Is PA the New Model for Financing Energy Efficiency?

We hope so. This market-based consumer finance program based on a concept HARDI has been promoting to states and utilities over the last year is not only sustainable, but also a highly efficient use of energy efficiency program dollars. Other states should follow PA's lead and address the real barrier to residential energy efficiency deep retrofits: today's lack of affordable consumer financing.

What Businesses Need to Know About SBA 504 Loans

Here's an excerpt from this good WSJ article regarding SBA 504 loans:

"The government is trying to entice more small businesses to tap one of its loan programs. Before applying for one of these loans, though, there are some fine points borrowers should consider."

There is constant discussion in Washington these days about additional expansions of this loan program which may offer some financing relief to contractor customers.

Credit Crunch Wide-Reaching on Victims and Culprits

Banks, regulators, small businesses, and Congress all appear to have a share of the blame for the prolonged credit crunch, discusses this excellent WSJ piece. It sounds like funds are out there, but so too is severe risk aversion and rampant economic uncertainty...certainly not a recipe for a robust recovery.

WSJ Discusses Federal Energy Efficiency Incentives

Thanks to ACHR News for Tweeting this WSJ article. In it, the WSJ talks about the growing movement to extend the 25c residential tax credits, and how they might interact with the Home Star proposal. As I've discussed before, Washington's appetite/political will for new spending measures has all but dried up so Home Star faces a stiff challenge. Extending 25c may just been the path of least resistance if the right vehicle for doing so can be identified.

Stimulus Benefits of Weatherization Questionable

Massive stimulus bill appropriations for weatherization programs has translated in the little energy savings or jobs according to this latest report. Averaging over $8,000 per home, the WAP's ROI is coming under fire.

Texas Announces $6mil for Energy Sector Training Centers

The State Energy Conservation Office (SECO) Stimulus Program will provide up to $6 million dollars in federal funding from the American Recovery and Reinvestment Act of 2009 (ARRA) to ensure that Texas has the skilled workforce needed to obtain employment and meet the growing demands in the energy efficiency and renewable energy industries. Click here for Request for Applications information.

Enjoy Your EPA-DOE Irony Laugh for the Morning

Shortly after being praised and funded millions of stimulus dollars by the Administration and the DOE, Cummins Inc. was fined $2.1 mil by the EPA for Clean Air Act violations. Better yet, the fine represented just under 4% of the federal funds awarded to Cummins last year.

Free Webinar on Building Energy Code Adoption and Enforcement

The National Association of State Energy Officials (NASEO) is hosting a free webinar on building energy code adoption and enforcement, Friday, February 26 from 1:00 - 3:30 p.m. ET. Here are complete details and access information. There are significant financial and policy incentives for states to adopt and enforce much more stringent building energy codes that must affect HVACR systems so a free program delivered by a major driver of these code advancements is a rare and important opportunity.

DOE & EPA Partner to Drive Energy Efficiency in States

Courtesy of today's ASHRAE Govt. Affairs Update:

DOE and EPA Join States to Speed Progress on U.S. Energy Efficiency

DOE and the U.S. Environmental Protection Agency (EPA) announced the creation of the State Energy Efficiency (SEE) Action Network. This network will help states achieve maximum cost-effective energy efficiency improvements in homes, offices, commercial buildings, and industrial facilities by 2020. Through the network, member organizations will assist states with their energy efficiency initiatives, including residential efficiency programs, financing solutions, and improved availability of energy usage information.

Led by DOE and the EPA, the SEE Action Network will provide targeted technical assistance to states in order to reach national energy goals. The network will drive energy efficiency by using a broad set of goals from the National Action Plan for Energy Efficiency, a public-private initiative that began in 2005 to create a sustainable commitment through the collaborative efforts of gas and electric utilities, utility regulators, and other partner organizations. Its goals range from establishing state-of-the art billing systems about consumer energy use to developing strong energy efficiency policies at the state level.

The initiative's National Action Plan Vision for 2025: A Framework for Change, last updated in 2008, outlines strategies to cut the growth in U.S. energy demand in half, achieving $500 billion in net energy savings and substantial reductions in greenhouse gas emissions by 2025. The SEE Action Network aims to achieve those goals five years early. To kick off the new network, the SEE Action Executive Group will meet in early March. See the DOE press release (http://www.energy.gov/news/8591.htm) and the Web sites for the SEE Action Network (http://www.epa.gov/cleanenergy/energy-programs/seeaction/index.html) and the National Action Plan for Energy Efficiency (http://www.epa.gov/cleanenergy/energy-programs/napee/index.html).

TARP Redirection May Benefit Contractors

This NYT article outlines out the Treasury Department has redirected $1bil in TARP funds to community banks and credit unions in an attempt to free up lending capital for small businesses. This may be especially helpful to contracts who have found their credit lines tightened or eliminated all together.

Residential Tax Credit Form Clarifications

HARDI's federal Energy Efficiency Credits FAQ blog has been updated to address the confusion caused by the recently-released 2009 IRS Form 5695 regarding the qualifying levels for air source heat pumps. Go here for the full explanation, but the crux is that the form is correct but horrendously worded. Air source heat pumps with an HSPF of 8.5 installed after February 17, 2009 do still qualify for the tax credit up to $1,500.

State Appliance Rebate Programs Moving Quickly

In response to a letter sent to all state energy offices yesterday offering to help drive and promote HVAC product rebates as part of State Energy Efficient Appliance Rebate Programs (SEEARPs), HARDI has received a lot of information from various states about rebate programs about to launch, and some that have already launched. HARDI members are encouraged to visit and track www.hardinet.org/seearp for the latest news and your state's program details and effective dates. Many states are planning advanced webinars to rollout the details of their programs to stakeholders so HARDI will be issuing state-specific alerts as we get more information. In the meantime, track www.hardinet.org/seearp for realtime updates on each state program.

HARDI to Provide SEEARP Guide and Resource for Members

Over 40 U.S. states have had their State Energy Efficiency Appliance Rebate Programs approved and the rest are expected to follow suit by the end of January. SEEARPs are funded by a $300 mil Department of Energy ARRA appropriation with which states can offer rebates to residents who purchase Energy Star or better appliances. HARDI is isolating those states that have chosen to include HVAC products in their rebate programs, and will be providing updates on those and other states as more plans are approved or details are released. This resource will be made available to HARDI distributor members in early January because the HVAC industry will need to be ready to quickly mobilize to effectively compete with retail products for these first-come, first-served rebate funds in most states.

NY Approves Property Assessments for Solar and Energy Efficiency

The New York legislature passed a law authorizing municipal loan programs for renewable and energy efficiency improvements to homes and businesses. The measure allows municipalities to use Property Assessed Clean Energy (PACE) financing. Under PACE, cities or counties set up special clean energy finance districts capable of issuing low-interest bonds to participants. The bonds are used to cover the costs of renewable energy and efficiency improvements on private property, and participants pay the loans back through a 20-year assessment on their property taxes.

PACE programs are entirely voluntary. There are no requirements for municipalities to set them up for homeowners to take out loans from the programs. They are now allowed by state law in California, Colorado, Florida, Louisiana, Maryland, Nevada, New Mexico, New York, Ohio, Oklahoma, Oregon, Texas, Vermont, Virginia, and Wisconsin

Recently, DOE announced $454 million in Recovery Act funds to help set up programs such as PACE. For more information, read the New York governor's press release (http://www.ny.gov/governor/press/press_1116091.html), and the DOE Energy Efficiency and Conservation Block Grant Program application (http://www.eecbg.energy.gov/about/competitive_grants.html).

State Appliance Rebate Programs Approved

The DOE recently awarded $300 mil to each state for an Energy Star Appliance Rebate Program distributed on a population-weighted basis. State plans for this program, which HARDI helped several states with for HVAC products, were due in October then DOE was scheduled to start distributing funds on November 30. As of December 7th, 36 states' plans had been approved and the rest are expected to be completed soon. Courtesy of this ACCA Hot Air blog post, equipment distributors can find a current list of all approved state plans on DOE's website here. Not all states included HVAC products in their plans, but hopefully this program will increase the number of states that maintain annual appliance rebate programs that could include HVAC products. For those states that do include HVAC products, the money is first-come, first-served so it will be extremely important for HARDI distributors to know their state plans quickly, and immediately begin educating contractor customers on selling and obtaining the rebates for their residential customers.