Be ready to harness market forces in '06

AS WE END 2005 and look forward to the new year, we can't help but observe that market forces are lining up in ways that favor plumbing-and-heating contractors. You have to make sure that you have the marketing programs and properly trained people in place to take advantage of these opportunities. Last month in this space, we said that higher energy prices this winter would help to fuel your customers'

AS WE END 2005 and look forward to the new year, we can't help but observe that market forces are lining up in ways that favor plumbing-and-heating contractors. You have to make sure that you have the marketing programs and properly trained people in place to take advantage of these opportunities.

Last month in this space, we said that higher energy prices this winter would help to fuel your customers' interest in the more efficient heating equipment that is on the market today as well as in products powered by alternative energy sources, such as solar, in the future. While some energy prices have eased, they still remain at a level that will keep your customers aware of the need to use energy more wisely than they ever had previously.

We also mentioned the new U.S. Energy Act that will provide tax incentives to customers that invest in highly efficient equipment. Although far from perfect, the law takes effect Jan. 1, 2006, and can help you make the case for energy conservation in your marketing programs and sales presentations.

Despite what has been reported in the general media, you can't take for granted that your residential and commercial customers are aware of this new law. You have to take the lead in educating them about the tax incentives now available to them. To do that, you have to make sure that you and your employees understand what the law means for customers.

Homeowners can claim up to $500 in tax credits for purchasing highly energy efficient equipment that qualifies under the law. Examples include boil-ers with an AFUE of at least 95%, water heaters with an energy factor of at least 0.80 and electric heat pumps with an EER of at least 13. Further, homeowners can receive an incentive of up to $2,000, or 30% of a qualifying expenditure, when you install alternative energy equipment, such as solar panels and fuels cells, in their homes.

Your commercial customers can take advantage of new tax incentives too. They can claim up to $1.80 per sq. ft. for energy-efficient improvements such as water heating and HVAC equipment for their buildings.

Although water efficiency is not addressed in the new federal energy act, plumbers stand to benefit from other forces at work in their market. Water utilities and conservation groups are drawing more attention to the need to save water, and plumbing products are one of their targets, as usual.

At a recent meeting of the Plumbing Manufacturers Institute, an official from the U.S. EPA pointed out that water conservation is no longer an issue restricted to Western states. Other regions are experiencing water shortages as well. He added that the EPA is considering incentives for industries and facilities that save water.

The opportunity for contractors lies in the fact that products already are on the market that can address this issue. A California study estimates that one-third of the state's urban water use could be saved using existing technologies.

Another study revealed 100 million inefficient toilets in U.S. residences and another 20 million in commercial applications. The study defines inefficient fixtures as those with design flush volumes that exceed 1.6 gal. per flush. If those numbers are anywhere close to being accurate, they represent a huge replacement or service opportunity for plumbing contractors as well as manufacturers.

As is the case with installing energy-efficient heating equipment, they also represent an area where contractors can make a tremendous impact in conserving our natural resources. Marketing programs and sales presentations should include details of this important mission that will benefit your customers in tax credits and cost savings, as well as the environment.

Hiring and training sales reps and service personnel who can understand — and then explain —the value of what you can bring to your customers is essential. Your skilled employees will allow you to harness the market forces that are working in your favor next year and beyond.