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Tax Credits Help To Upsell Customers

March 20, 2006
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ST. LOUIS - Emerson Climate Technologies is encouraging HVAC contractors to use the 2005 Energy Bill tax incentives to help upsell homeowners to higher SEER systems. The bill, enacted in late 2005, offers homeowners a tax credit if they purchase a 15 SEER or higher HVAC system between Jan. 1, 2006, and Jan. 1, 2008. The Energy Policy Act of 2005 includes a provision for residential energy efficiency (Title XIII, Section 1333) that provides a 10 percent tax credit of up to $300 for the purchase of qualified energy-efficient air conditioning systems and heat pumps for existing homes. According to the policy, "qualified" means meeting or exceeding the following: Heat pumps must be at least 15 SEER; and central A/C split units must meet the highest energy-efficiency tier of the Consortium for Energy Efficiency (CEE) (15 SEER or higher, 12.5 EER, 8.5 HSPF).

While results from Emerson's 13 SEER surveys show that many contractors understand the upselling opportunity presented by the new regulation, they also show that most contractors are very concerned that the increased selling price of the new units may deter many homeowners from upgrading. "It is important that contractors understand that the $300 tax credit alone is not going to sell units," said Karl Zellmer, vice president of air conditioning sales for Emerson's Copeland Corp. "However, when combined with a selling strategy focused on upselling benefits like comfort, humidity control, energy efficiency, and reliability, contractors may be able to educate homeowners and help influence their purchasing decisions.

"With the minimum efficiency at 13 SEER, contractors need to understand that higher SEER by itself will no longer be a differentiating benefit they can use to upsell their customers," said Zellmer. "13 SEER is now driving the need for a total change in mindset across the industry. Contractors who take a strategic look at their business and assess other ways to differentiate and upsell in a 13 SEER marketplace will continue to be successful."

For more information on the Energy Policy Act of 2005, visit www.emersonclimatecontractor.com.

Publication date: 03/20/2006

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