Energy Star, tax credits create opportunities

Two events this year have created new opportunities for plumbing and heating contractors: Energy Star released efficiency criteria for five categories of residential water heaters, equating to a huge leap in energy savings, and the Stimulus Bill provides new or expanded tax credits for four water heater types. In ascending order of energy savings, the Energy Star qualifying units are as follows. High

Two events this year have created new opportunities for plumbing and heating contractors: Energy Star released efficiency criteria for five categories of residential water heaters, equating to a huge leap in energy savings, and the Stimulus Bill provides new or expanded tax credits for four water heater types.

In ascending order of energy savings, the Energy Star qualifying units are as follows.

High efficiency gas storage water heaters, a more efficient version of the traditional tank storage unit, have an annual energy savings of 7.3%.

Gas tankless water heaters, which offer continuous hot water and space savings and last twice as long as a conventional unit, have an annual energy savings of 30%.

Gas condensing water heaters, which will provide nearly continuous hot water, have an annual energy savings of 30%. Energy Star qualified units are expected on the market in late 2009.

Solar water heaters, which serve as pre-heaters for storage or tankless units, have an annual energy savings of 50%. Solar is most practical in homes with a south-facing roof or ground space with unobstructed sunshine for six hours a day.

Heat pump water heaters, which cool and dehumidify the surrounding air, have an annual energy savings of 55%. Energy Star qualified units are expected on the market in late 2009.

The tax credits were devised to increase demand for new units. There's profit-making potential for you, but only if contractors are trained to do the job. For all but storage water heaters, installation can be more complex.

“In tankless units, a lot of the work is in sizing the gas line,” said Michael Wheat of James A. Wheat & Sons, Gaithersburg, Md. “The existing gas line usually isn't large enough. This means you either relocate the water heater or run a new gas line to it. Then there's the direct venting of the water heater to the outdoors.”

According to Wheat, if you already do HVAC work, tankless units aren't hard. “We do heating and air conditioning, so the technical aspect is no problem for us,” said Wheat.

Installation for gas condensing and heat pump water heaters will offer its own challenges. For instance, gas condensing units will require a power vent and condensate drainage, increasing the installed cost. But again, if your company already handles HVAC, these may be the kind of challenges you deal with every day. If you're already installing the commercial versions of these units, residential will be an easy transition.

Solar is a different ballgame altogether. Keith Winston, principal of Earth Sun Energy Systems, Hyattsville, Md., is a solar PV and thermal hot water installer. A strong proponent of renewables, even he cautions contractors to step carefully.

“There are going to be a lot of surprises to anyone coming into the solar field,“ said Winston. “Most of what plumbers have to do in terms of installation will fall within what they already know, but system design and equipment selection will lie outside their skill set.”

This could mean having to pull in other contractors, which could cut into your profit.

“Often, you're overlapping several different trades in one install,“ commented Winston. “Electrical, roofing, plumbing. That's not unusual for plumbers, but it adds to the number of considerations. And it's easy to get bamboozled. Some solar technologies are demonstrably ineffective.”

This is where the Energy Star label can help, as the Department of Energy only offers the label to systems that meet strict performance criteria.

Good training is also key. Winston recommends contacting the North American Board of Certified Energy Practitioners (NABCEP), which offers a certification program for installers. The Solar Energy Industries Association (SEIA) is another helpful resource.

For all the difficulties, there are some big advantages. First, there are few knowledgeable solar contractors, so the market is wide open. Second, solar requires a backup system.

“Potentially it's a big win for plumbers because it's essentially a second system on top of the existing or backup system — but with the caveat that you want to make sure you get the details right,” said Winston.

Gas condensing water heaters are Energy Star certified and qualify for the 30% tax credit up to $1,500. The same is also true of both gas tankless water heaters and heat pump water heaters. Solar water heaters also qualify for the 30% tax credit, but there is no dollar limit to how much can be written off. Contractors should check www.dsireusa.org for state and local solar tax credits and can learn about Energy Star water heaters at: www.energystar.gov/waterheaters.

Susan Conbere writes on behalf of Energy Star for the U.S. Department of Energy. Conbere is with D&R Intl., an environmental consulting firm based in Silver Spring, Md.

TAGS: Green