Keeping tabs on Home Star is like playing the arcade game "Whack-a- Mole." After passing the House as H.R.5019, the Home Star Energy Retrofit Act of 2010 started as Senate Bill S.3177, then as Senate Bill S.3144. Building Performance Institute (BPI), a New York-based non-profit, failed in its push to make it an amendment to the Small Business Jobs bill. Now Home Star is in the Clean Energy Jobs and Oil Accountability Act (Senate Bill S.3663).
Why is Home Star worth watching? Home Star is a $5 billion package intending to create new jobs and improve American homes through point-of-sale rebates to encourage homeowners to make energy efficiency upgrades.
It's easy to support the purposes of Home Star. Serious concerns lie in implementation.
Our country is entering a new era. Homes require a previously unseen level of professional competence. Gone are the times when a "shade tree mechanic" who, with a bit of ingenuity and talent, could figure out a problem and fix it. Being clever isn't good enough. Theory comprehension and understanding building system integration are critical. Recognizing the need for replacing an aging workforce with talented, trained and motivated people within the HVACR industry, professionals, associations and technical schools are developing and implementing solid programs for training and certification. Specifying one particular program ignores many others.
Whether Silver Star or Gold Star, the legislation requires the rebate to be clearly shown as a discount on the proposal. For example, if the proposal is $10,000 with a rebate of $1,000, the customer writes a check for $9,000. The rebate aggregator will send the contractor a check for $1,000. A maximum waiting period of 30 days is claimed.
In a July 23, 2010, letter to Senate leadership, Air Conditioning Contractors of America points out:
"First, the HSC (Home Star Coalition) is correct when they write that they are 'consensus amongst contractors' regarding the ideal structure of a rebate incentive. However, the contractor consensus is the opposite of HSC's position!"
In fact, on July 19 the Senate leadership received a letter from six national contractor associations, including ACCA, representing over 193,500 contractors nationwide, expressing the true contractor consensus, which is that the most efficient and effective way to offer a rebate program for homeowners is to pay the homeowner, and not require a small business contractor to float a loan it can ill afford for a lengthy period of time.
Yet, the proposed Home Star legislation mandates that rebate aggregators pay contractors within 30 days (although the 30 days would start with the filing of paperwork, not with the actual purchase of equipment, which may occur weeks before the job is done). The question we ask is, "Or else what?"
The actual reality is — our thousands of members have learned first-hand through participation in multiple incentive and rebate programs in the states all over the country that the deadlines are often missed and the cash-strapped contractor has no real recourse. Even if there are penalties, the contractor still doesn't get paid.
We are talking about small business livelihood here, real people, real jobs ... not an abstract number on a ledger in a corner office on Wall Street.
Waiting for payment creates issues with contractor's cash flow, delaying critical funds, which could be used for payroll and benefits for new hires.
What does Home Star mean to contractors? It should mean new work and new income during lean times. There are claims of 150,000 new jobs. How is this possible when money is tied up waiting for rebates, additional education and certifications, and fees upon fees?
A Gold Star qualified contractor must be accredited by BPI and must employ a certified workforce.
Quoting ACCA’s letter: "The Home Star legislation as drafted would force highly experienced, high quality small contracting businesses to do one of three things: Spend thousands of dollars on training and equipment in order to compete for Home Star jobs; or choose not to participate in the Home Star program, thus denying homeowners choice and funneling federal rebate dollars to a smaller number of firms; or become a subcontractor to someone who may have little more than a few hours of classroom practices or online training, but it is somehow considered by this legislation to be more 'qualified' in home performance. "
Properly trained and certified professionals are going to be excluded from Gold Star during the first year and completely excluded from the Home Star program after Silver Star phases out. Current BPI accredited contractors with a certified workforce are in a position to reap the lion's share of available funding. Since the bulk of BPI contractors are located in the Northeast there is a good possibility by the time contractors get the proper certifications, limited, if any, funding will remain. Contractors will have invested precious time and money to become eligible only to find an empty pot.
One BPI affiliate with a BPI "preapproved curriculum" boasts on its website, "Have your company BPI accredited and ready to reap the benefits of Home Star in only one short week!"
ACCA comments: "If this accreditation is really so easy get, how beneficial can it be?"
In the Home Star bill, "The term accredited contractor means a residential energy efficiency contractor that meets the minimum applicable requirements established under subsections (a) and (b) of section 3004.” Subsection (a) describes contractor qualifications for Silver Star include licensing requirements, insurance coverage of $1 million for general liability and provide a one-year warranty and an agreement to provide the homeowner a discount of the full economic value of all rebates received under this title with respect to the home. Subsection (b) describes contractor qualifications for Gold Star as meeting the requirements under subsections (a) and (b), is accredited by BPI or other standards that the Secretary shall approve, must employ a certified workforce and meets all requirements of the quality assurance framework.
Gold Star eligible contractors are required to be accredited by BPI and maintain a BPI-certified workforce trained by BPI affiliates, tested by BPI proctors and BPI field examiners, reviewed by the BPI quality assurance program, all the time paying fees to BPI. After one year, the contractor is required to pay BPI renewal fees, pay BPI a portion of his gross income (under the BPI Quality Assurance Fee Schedule), take CEU classes from BPI affiliates and be tested by BPI proctors and field examiners.
ACCA suggests: "If the purpose of the Gold Star program is to promote whole home energy improvements, let's make the bill about promoting whole home energy improvements." That sounds like a great idea.
Tom Meyer, CSME, GGP, CBCP, QCxP, is director of government and professional relations for The ESCO Group, Washington. He can be reached at [email protected].