Legislation creates incentives for installation of energy-efficient technologies

April 1, 2009 By and    

The American Recovery and Reinvestment Act (ARRA) of 2009 was signed into law on Feb. 17.

This stimulus package offers a wide range of incentives for consumers and businesses, including an extension of federal tax credits for installing energy-efficient technologies in existing homes.

The Propane Education & Research Council (PERC) had one of its research partners, Newport Partners LLC, perform a summary of ARRA as it relates to propane and related building technologies. There is plenty of stimulating information for consumers and propane retailers to use to their advantage. The summary of ARRA can be downloaded from the Propane MaRC at www.propanemarc.com.

The main points
• Extension of federal tax credits for energy efficient technology upgrades in existing homes through 2010

• Increased credit cap to 30 percent of the cost of energy efficient equipment upgrades, including installation material and labor for heating, cooling and water-heating systems

• Individual appliance dollar caps removed and replaced with $1,500 maximum credit on the total of energy efficient heating, cooling and water heating equipment upgrades

• $300 million into the states’ energy efficient appliance programs, which allows states to offer rebates and other incentives for Energy Star qualified residential products like propane tankless water heaters

• Double dipping on credits allowed. Previous restrictions lifted on the use of federal tax credits plus other subsidies or rebates.

How big is this opportunity? The National Association of Home Builders projected that energy tax credits will generate $6 billion in remodeling jobs. Start working now on marketing your company as a ready and willing advocate of the energy efficient equipment upgrade portions of ARRA.

If you sell and install high-efficiency appliances, incorporate the tax-incentive information in your marketing and advertising efforts. If you prefer to depend on trade allies to sell the propane equipment while you take the gas load, now is the time to visit each of them to make sure they understand how ARRA can help make your and their clients’ homes more efficient in an affordable way with propane.

The 30 percent federal tax credit means a consumer can make a $5,000 or more purchase of energy efficient propane equipment and take full advantage of the $1,500 tax credit limit. This is a great incentive for consumers to upgrade that old heating oil or propane furnace to a high efficiency propane model and replace that electric water heater with an Energy Star qualified tankless model. You may even be able to change out some of those old inefficient electric heat pumps to propane equipment too.

For those propane retailers that are still concerned about losing gallons to efficiency and conservation, I suggest you approach this tax-incentive program with a positive attitude. Remember that there are several million electric water heaters out there that can be switched to propane models to replace those lost gallons from efficiency gains in other areas. Plus, you are able to offer affordable propane upgrades that help to prevent energy switching to competitors like electric or geothermal.

State your case
At last count there were 19 states that offer rebates and other incentives for efficiency upgrades to Energy Star qualified residential products like appliances, heating equipment and tankless water heaters. With this new stimulus money pouring in, states and municipalities in the program will be upgrading their offerings, and states that hadn’t previously offered such a program will be scrambling to get one started. The availability of such rebates can be checked at the Database of State Incentives for Efficiency and Renewables at www.dsireusa.org.

Don’t forget about the propane industry appliance rebate programs being offered by state and regional propane organizations in 20 states. Those rebate programs are mapped out on the PERC website www.usepropane.com.

With double dipping on tax credits allowed and propane industry rebates added to the incentive package, propane marketers have a perfect opportunity to stimulate new gallons. Is your company going to cash in?

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