Stimulus bill offers aid for green remodels
March 03, 2009
Stimulus bill offers aid for green remodels
By Tanja Kern
Professional remodelers could soon have something to whistle about while they work, now that President Obama’s $787 billion economic stimulus bill has been signed into law. The bill offers aid to homeowners in the form of tax credits for energy-efficient upgrades and to weatherize homes for low-income families.
If successful, Congress anticipates the American Recovery and Reinvestment Act of 2009 could bring $6 billion of work to the remodeling industry for contractors who can market projects that promote energy efficiency. However, remodelers are a bit skeptical about the effect it will have on business.
“In and of itself, it isn’t going to make a huge difference, but it’s part of the overall package,” said Frank McConnell, GCP, owner of Residential Transformations LLC in Treasure Island, Fla. “There are a series of things that will help the remodeling industry, and I think to the extent that the stimulus flows through, I think it can help,”
“It would be nice to say that the stimulus will have an effect on business, but I don’t really see that happening,” noted John Martin, owner of Straight and Level Construction Co. in Austin, Texas. “Nothing has come my way yet, but we’ll see what trickles down.”
Buildings use approximately 40 percent of energy consumed in the United States today, so increasing the efficiency of buildings is one of the most effective ways to lower energy consumption, save money, and reduce carbon emissions, according to the U.S. Department of Energy. The recovery package includes funds to weatherize more than a million homes. It begins with a home energy audit to identify which improvements—from adding insulation to sealing leaky windows, roofs, and doorways to upgrading furnaces and appliances—will have the greatest impact.
Here’s how the stimulus will affect remodeling:
- The stimulus offers a tax credit up to $1,500 that covers 30% of the purchase price of new energy efficient windows, air conditioners, water heaters and insulation. The products must be 15 to 20% more efficient than standard models.
- In addition, the package offers $5 billion to help low-income families weatherize their homes and reduce energy costs. The money for the Weatherization Assistance Program will be used to install more energy-efficient heating and cooling systems, air filters, improved windows and better insulation. It raises the amount that can be spent per house from $3,055 to $5,000. The bill limits funds to families who make no more than $32,000 for a family of four.
- The U.S. Department of Energy says that families that improve their homes as part of the Weatherization Assistance Program can save up to $413 annually on energy bills. That’s a significant savings for low-income families, who spend approximately 17 percent of their income on energy.