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0 Comments | Jul 12, 2010

Home Star Energy Retrofit Act of 2010

Remember last summer’s “Cash for Clunkers” government initiative? Well, there is a new program in town, and the money flow has started. It is also referred to as  “Cash for Caulkers”. The representatives behind the Act are Edward Markey (D-Mass.), Peter Welch (D-Vt.), Vern Ehlers (R-Mich.), and Dennis Cardoza (D-Calif.). The new bill was passed this spring and its official name is the Home Star Energy Retrofit Act of 2010. It authorizes up to $6 billion worth of tax rebates to homeowners for installation of energy efficient home improvement products.

Within the Energy Retrofit Act, there are two programs: Silver Star and Gold Star. Silver Star tax rebates will target consumers who go out and buy qualifying replacement window products. Also, other energy efficient products are included under the eligible products list. The Gold Star program focuses its rebates on whole-home energy savings, and the qualifications of the rebate under the Gold Star Program will be discussed a little later.

Dan Taddei, director of education and certification at the National Association of the Remodeling Industry, says, “We can all play at the Silver level.” This is true in that existing home remodelers will look to buy new window products in order to qualify for the Silver Star rebate program. This would mean that contractors and dealers could all benefit, along with the ambitious homeowner looking for a DIY project in installing replacement windows.

An important element of this Silver rebate level is that the hired contractor must meet these requirements: state license holder, recipient of general liability insurance coverage of at least $1 million, warranties provided for at least one year after the completion of the work, and agreement to pass on rebate to the homeowner after having purchased the qualifying replacement window products. If all these requirements are meant, then the contractor’s next step would be to get connected with a rebate aggregator, the liaison between the government issuing the rebate and the retrofitter (contractor). The contractor is required to give the rebate to, as mentioned before, the homeowner, and then will be reimbursed by the aggregator within 30 days.

When all is said and done, the maximum possible rebate is double that of the current amount that can be issued to any one entity under the American Recovery and Reinvestment Act, or $3000. Now, the Gold Star level of the rebate program requires that the entity performing the work be accredited by BPI (the Building Products Institute) or another approved agency. It also includes a before-and-after comparison of energy consumption to show that actually savings are possible and will ensue. This change in energy consumption must be marked by a quality assurance provider, certified by the International Code Council: BPI, the Residential Energy Services Network (RESNET), a state, a state-approved residential energy efficiency retrofit program, or any other approved entity. Consumers will not have to save energy bills to show improved performance.

Fifteen to twenty percent of the retrofits done by the necessarily qualified contractors will be randomly subject to field verification by an “independent quality assurance provider”. This is true for only 10 percent of jobs if the entire workforce doing the project is qualified (as in, if every employee has been certified, so too has the entire company been certified).

The Silver Star Program will be in place for one year, or until the money runs out, whichever comes first. Cash for Clunkers was so popular last year that the money well ran dry after a mere two months. The Gold Star Program will be effective for two years. There’s no telling how this will all pan out, but there is certainly a lot of potential for change, for better or worse, in the window industry in the next year or so.