The most important thing to know about the Home Star legislation now pending in Congress is that the bill is first and foremost an emergency job creation package developed to address the persistent crisis in America’s construction sector. With around one in five skilled construction workers now facing long-term unemployment, Home Star was designed to generate an immediate spike in consumer demand for efficiency-related home improvements and deliver a huge shot in the arm for HVAC businesses nationwide.
If enacted, Home Star will drive $5 billion in incentives and financing into the marketplace over the next two years, creating more than 150,000 jobs and reaching 3 million homes. It is structured to enable rapid deployment in today’s market with minimal red tape and bureaucratic delays.
SILVER STAR AND GOLD STARThe Home Star rebate structure has two separate incentive tracks. The Silver Star track funnels nearly $3 billion (or about two-thirds of the Home Star rebates) to energy efficiency measures such as furnaces, ducts, and insulation, installed by any company with a contractor’s license (where applicable), general liability insurance, and a one-year warranty. No other certification or accreditation is required for Silver Star, which rebates up to $3,000 in materials and labor per household - potentially twice as lucrative as current tax credits. For HVAC installations alone, your customers could get a $1,500 rebate for installed high-efficiency equipment, and an additional $1,000 for properly installed ductwork.
Home Star also creates a performance-based Gold Star track, with incentive levels tied to predicted energy savings. Gold Star begins with an energy audit, which forms the basis of a multi-measure retrofit encompassing HVAC, insulation, air sealing, and other efficiency improvements - the more energy the work will save, the bigger the rebate for the homeowner, up to $8,000.
In most cases, HVAC improvements will be a critical component of retrofits that qualify for the higher level of Gold Star incentives. Furthermore, a recent poll found that two out of three companies that intend to conduct Gold Star work do not have HVAC in-house, so that work will be subcontracted to businesses like yours. Gold Star projects will create HVAC jobs.
Because Gold Star requires contractors to perform whole-house energy audits and computer modeling, specialized training and accreditations are necessary to build confidence in the system. The Home Star legislation references the Building Performance Institute (BPI) as an immediately accepted accreditation for companies that do general contracting on Gold Star jobs, but the DOE will be empowered to approve additional systems that meet minimum requirements. Meanwhile, more than 200 training facilities and online classrooms serving every state in the union are providing Gold Star-level training and certification, and trade certifications such as NATE are recognized by BPI as fulfilling key requirements of accreditation.
Home Star rebates were designed to be offered to customers at the time of sale, and paid to contractors within 30 days after the job is complete. The full administrative cost of the Home Star system will be paid by the program - not by contractors or homeowners. Home Star will enable you to provide a substantial rebate directly to homeowners when they are ready to buy, rather than expecting customers to come up with the entire cost up front.
The federal government has virtually no history of implementing rebates directly to consumers, and such a system would be almost impossible to get to market quickly. Alternatively, if Home Star was based on tax credits, eligible homeowners would have to wait until tax time to see any benefit, and the high percentage of Americans who pay no income tax (47 percent in 2009, according to estimates by the nonpartisan Tax Policy Center) would get nothing back at all.
Home Star passed the House of Representatives in May with bipartisan support. The Senate version has 33 cosponsors from both sides of the aisle and is included in the Clean Energy Jobs and Oil Company Accountability Act of 2010 (a.k.a. “spill bill”), which is likely to come up for a vote this fall.
Home Star, like all legislation, is not perfect. But the benefits Home Star will deliver to our industry far outweigh the concerns that have been raised about some aspects of the program, and any attempt to make substantial modifications at this point will only lead to failure in the Senate. A rare opportunity to inject new life into the industry is within our grasp. Make sure Congress gets the message that America needs Home Star to pass!
For the alternative view, see “The Trouble With Home Star.”
Publication date: 08/23/2010