Since the House of Representatives passed the Home Star Retrofit Rebate Program (H.R. 5019) in early May, many industry members have voiced their concern about certain aspects of the legislation.

H.R. 5019 provides $6 billion in rebates to homeowners who upgrade the energy efficiency of their houses through measures that range from attic insulation to furnace replacement. The legislation is also known as “Cash for Caulkers” since it was modeled after 2009’s “Cash for Clunkers” auto rebate program.

Chief among the concerns raised about the bill are the restrictions it places on contractors who perform the rebate work. The Home Star program would establish a two-tiered system for rebates - Silver Star and Gold Star. The Silver Star rebates are intended for smaller-scale projects, such as air sealing and replacing old heating/cooling equipment with new high-efficiency models. The maximum rebate amount provided per home under Silver Star is $3,000 or 50 percent of the total cost of the installed measures.

The Gold Star rebates are intended for whole-house energy reduction and are based on software simulations comparing the energy use of a home before and after retrofits. Gold Star provides a $3,000 rebate for a 20 percent reduction in a home’s total energy consumption, with an additional $1,000 for every additional 5 percent reduction. The maximum Gold Star rebate per home is $8,000.

Now that the House has passed its version of the legislation, the requirements for contractors to perform rebate work have come under scrutiny.

ACCREDITED CONTRACTOR

The most controversial aspects of the bill are the requirements for contractors performing Gold Star work. According to H.R. 5019, rebates will only be awarded to homeowners who use “participating accredited contractors” for this work. The bill defines an accredited contractor as a qualified contractor that is accredited by BPI or “under other standards that the Secretary [of Energy] shall approve or deny not later than 30 days after submittal.”

In a statement released by the Air Conditioning Contractors of America (ACCA), the association said it could not endorse Home Star because of the limited number of contractors eligible to perform Gold Star work.

Charlie McCrudden, vice president of government relations for ACCA, said, “Less than 500 companies across the U.S. meet the current definition under Gold Star of ‘accredited contractor.’ There are 33 states that have no contractors that meet that definition. So there’s a concern that if this program goes live, all the money for Gold Star will go to two states [New York and New Jersey].”

Others, however, believe that the current language of the bill does open the door for alternative certifications. Talbot Gee, vice president of Heating, Airconditioning and Refrigeration Distributors International (HARDI), said, “We were very pleased that we got a positive change made to the final House version to have more means of qualifying contractors in a timely fashion.”

BPI’s CEO Larry Zarker also refuted the idea that BPI will have a monopoly on Home Star accreditation. “My sense is that the bill actually does say the Secretary of Energy can approve any other accreditation,” he said. “While one [BPI] was put forward, that doesn’t create a monopoly, and so we welcome any other or equivalent kind of accreditation. We look forward to working with the HVAC industry to make the Gold Star accreditation attainable.”

CONTRACTOR OPINIONS

Contractors have varying opinions on the Gold Star requirements. While Rich Morgan, president of Magic Touch Mechanical Inc. in Mesa, Ariz., is a NATE Quality Circle contractor (meaning that more than 80 percent of his technicians and installers are NATE certified), he sees merit in the BPI certification requirement for Gold Star work.

“NATE is absolutely top shelf and should be the standard requirement for an HVAC technician,” he said. “By comparison, BPI is to building performance what NATE is to HVAC.” Morgan became BPI certified two years ago, and said that his BPI training taught him a different skill set. “I’ve been in the field for over two decades, but going through BPI training opened my eyes to a lot of things I didn’t know strictly from my HVAC side. I think we’re dummying up the field a little bit if we just say NATE certification is fine for this.”

Larry Taylor, president of AirRite in Fort Worth, Texas, is a longtime proponent of certification and third-party audits for home performance, but he is concerned that the detailed requirements in the current bill will not lead to a level playing field for contractors across all geographic regions and all trades. “We’re talking about health, safety, comfort, and energy efficiency,” he said. “It’s a balanced process, and Home Star is making a movement towards bringing this balance to the table. But there needs to be equal opportunity for all involved without having to play under one certain umbrella.”

CERTIFIED WORKFORCE

H.R. 5019 has also led to confusion and concern about the level of certification required for a contractor’s workforce.

Gee said HARDI and other associations are seeking clarification on H.R. 5019’s definition of a “certified workforce.” According to Gee, “What the bill says right now is that 100 percent of technicians have to be certified by one of the organizations named in the bill,” to be considered a certified workforce. These organizations include BPI, NATE, the Laborers’ International Union of North America (LIUNA), and established state programs.

Gee clarified, “For the first year of the program, use of a certified workforce only reduces the percentage of in-field verifications required.” The in-field verifications will be conducted by independent quality-assurance providers.

“However, the Quality Assurance Framework provision added during committee markup opened the door to a potential restriction that all Home Star work would have to be done by a certified workforce if a state wished to be the quality assurance provider (which we feel most will want to do).”

Gee continued, “We want to change the language to say that any Home Star work is supervised or performed by an appropriately certified technician. So it wouldn’t mean that a certified guy is turning every wrench, but an experienced guy is there to supervise.”

ACCA’s McCrudden added, “The concern with the certified workforce definition comes later under the quality assurance framework section of the bill when the states take over the program after year one. Certified work forces are not an initial requirement to participate in the program. But if a qualified or accredited contractor uses a certified work force, they would experience fewer random post retrofit verifications.” McCrudden added that many of his association’s members employ NATE-certified technicians, but very few have work forces that are 100 percent certified.

Many are hoping that these issues surrounding the qualification and certification of contractors for Home Star will be addressed when the bill is brought to the Senate floor. Gee said, “We want to make sure there’s a path in this incentive program to pull in more talent to the industry and use this as a valuable experience to gain experience under the tutelage of an experienced technician.” Overall, there is hope that the legislation will be a boon for the HVACR industry if it becomes law.

Sidebar: Qualifications

The Home Star program’s basic requirements for contractors are generally accepted in the industry. The legislation stipulates that contractors must:

• comply with any applicable state licensing requirements;

• have general liability insurance coverage of at least $1 million;

• provide 1-year warranties to homeowners;

• comply with quality assurance providers;

• agree by contract to properly pass along the rebate to the homeowner.

Publication date: 06/07/2010