Industry groups firm up positions on Home Star

WASHINGTON — Industry groups continue to establish their positions on the pending Home Star legislation under consideration in the Senate. Manufacturers and suppliers hoping to sell products under the bill, commonly known as “Cash for Caulkers,” favor the bill. Contractors still worry that they would be responsible for financing the energy retrofit work, and they object to the certification requirements. Plumbing manufacturers and the Alliance for Water Efficiency are lobbying for water conservation measures to be included in the bill.

A version of the Home Star rebate legislation has passed in the House but is awaiting action in the Senate. The legislation would spend approximately $6 billion on rebates for high-efficiency improvements to American homes, in two programs known as “Silver Star” and “Gold Star.” The most rebate money is available at the Gold Star level, but the Senate version of the legislation would require contractors to finance the retrofits and wait to be paid by the government. It also requires contractors to be accredited by the Building Performance Institute, Malta, N.Y., limiting the number of contractors who can perform the work.

Six contractor associations, representing 193,500 small businesses, have sent a letter to Senate leadership expressing their reservations about the bill.

In its letter, which may be read online here, Small Businesses for Job Growth in Energy Efficiency wrote Senate leaders to say that they are supportive of the legislation's goals, “but we want to raise some significant concerns about the format and structure of S.3434, the Home Star Energy Retrofit Act of 2010.”

Members of Small Businesses for Job Growth in Energy Efficiency include the Air Conditioning Contractors of America, the Green Mechanical Council, the National Association of Home Builders, the National Lumber and Building Material Dealers Association, the National Roofing Contractors Association, and the Plumbing-Heating-Cooling Contractors – National Association. Collectively these organizations serve over 193,500 small businesses in every state in the country.

Specifically, the associations raised concerns about two facets of the program: the proposed rebate structure, and the limitations of the Gold Star program accreditation requirements.

The way in which the rebate would be paid out favors large businesses over small contractors, the group said in its letter. Requiring the installing contractor to “front” a loan of several thousand dollars to a homeowner, and then wait for payment from a “rebate aggregator,” would place an enormous burden on small contractors, who have been deeply affected by the ongoing credit crunch facing small businesses. Most of the money from the program would flow to larger companies able to shoulder the financial burden, and deprive highly qualified, skilled small businesses of job-growth potential.

“While the current version of the legislation ‘requires’ the contractor to be paid within 30 days, the clock does not begin ticking until the project is complete, not when the project has been bid or the materials purchased,” the associations wrote.

The associations pointed out that the House version of Home Star required the rebate to be paid to the homeowner after sale, not the contractor, and said that the House version “had it right.”

“Homeowner rebates have been, and are currently being, used in several states for state and federal energy efficiency incentive programs with great success, in part due to their simplicity,” the associations continued. “Changing the intended recipient of the rebate program from the contractor to the homeowner will not affect the volume of rebates or the success of the program. In fact, it will encourage more contractors to participate and offer more options for homeowners to take advantage of the program.”

The associations wrote that they are very concerned about the requirement that only contractors accredited by the Building Performance Institute (or who meet some not-yet-set requirements by the administration) may be eligible to participate in the Gold Star rebate program.

“We are concerned that the accreditation requirement will limit the choice for homeowners who may want to take advantage of the Gold Star rebates that are determined by whole home energy improvements,” the associations wrote. “Despite exaggerated statements from some about the capacity for rapidly growing the number of BPI-accredited contractors, the reality is that 29 states do not currently have a single contractor who could offer homeowners a pathway to Gold Star rebates.

“And for those few who may choose BPI accreditation — which essentially involves paying an administrative fee and pledging good business practices — the training and accreditation costs can be thousands of dollars.”

Further, the associations objected to the structure of tax incentives included in Title II, Section 201 of the bill, which they said “seek only to promote a singular organization, the Building Performance Institute, and disallow equal access by all qualified and highly-trained workers, particularly small businesses that can legitimately undertake high-efficiency retrofit work … We object to allowing a single organization to be the only eligible entity to participate in a federal tax incentive program for retrofits.”

The associations concluded, “We hope that changes can be made to the Home Star proposal moving through the Senate to maximize the job creation and energy efficiency benefits of the bill. We look forward to working with you to address this issue as soon as possible.”

Mark Giebelhaus, president of Marlin Mechanical, Phoenix, told CONTRACTOR, “It is unreasonable to require contractors to finance the rebates for the homeowners and then wait for the government to issue the payments. As a member of the PHCC-NA Government Relations Committee, we have been very proactive in attempting to effect changes to this legislation.” Giebelhaus is also chairman of PHCC’s Past National Officers.

The National Association of Oil Heating Service Managers is in favor of the bill, flawed as it is, Executive Administrator Judy Garber said, noting that her segment of the industry had fought to get oil-heating equipment included in the bill.

“Is the Home Star Bill a perfect bill? No, it is not,” Garber said. “Many within our own industry feel that it is flawed and take issue with some of the requirements, the main one being the way the rebates would be handled. We do believe that this puts many smaller businesses at a disadvantage and as you might assume, most oil companies are small family owned businesses.”

Garber also expressed unhappiness with the BPI accreditation requirements, noting that it ignores other certification programs such as NAOHSM’s own long-established and well-respected certification program.

On the other side of the issue, North American Technician Excellence announced that HVACR technicians who had earned the NATE Efficiency Analyst certification would be qualified to perform work under S.3434.

The NATE Efficiency Analyst exam was developed in conjunction with the U.S. Department of Energy and the Consortium for Energy Efficiency in an effort to promote HVACR installation practices that save energy and reduce peak demand. The senior-level certification exam, which requires that the technician already possess at least one cooling and one heating service certification, tests a technician’s knowledge of the installation, service, maintenance and repair of HVACR system operations to maintain high levels of energy efficiency or suggest ways in which energy usage can be dramatically reduced.

“The HVAC Efficiency Analyst senior certification validates the ability of technicians who have passed the exam to help consumers take advantage of incentives available through the Home Star Energy Retrofit Act of 2010 as they upgrade heating and cooling equipment,” said Patrick Murphy, vice president of certifications at NATE. “The exam also provides a way for HVACR technicians to differentiate themselves as energy efficiency experts, which is so important at a time when energy costs are on the minds of most Americans.”

Also among the proponents, the Home Star Coalition announced that it has 2,000 members in favor of the legislation. The coalition, not unexpectedly, includes insulation manufacturers, big box home centers and environmentalist groups, among others. It also includes, however, national mechanical service operation, The Linc Group.

“Home Star is the right investment for the country at the right time. That time is now,” said Tracy Price, CEO of The Linc Group. “Energy efficiency is not a partisan issue, as it helps move us toward greater energy independence and enhances our national security. This program is targeted at the largest marketplace in the country, existing homes, and will create jobs in a new industry that will thrive for decades.”

At press time, S.3434 was still being debated in the Senate, although it may have passed by the time the August print edition of CONTRACTOR mails.
Updates will be provided on Contractor's website.