Efficiency First

Limited Impact of Stimulus Funding on Home Performance Market
Recent study shows only modest gains in efficiency retrofitting despite $4.3 billion in new federal tax credits

GigaOM’s earth2tech blog site reported earlier this week on new research into the real impact of American Recovery and Reinvestment Act funding on the home energy retrofit market. According to a report from the research firm Canaccord Adams (www.canaccordadams.com), the stimulus package has so far produced only modest gains in Home Performance retrofitting. In earth2tech’s words:

The $4.3 billion in stimulus tax credits for better insulation, double-paned windows, and other energy-saving measures are having a “small but positive” effect on the home remodeling market, research firm Canaccord Adams concludes in a report published today. Any uptick is welcome in this struggling economy, but such modest results after six months raise the question of whether or not the credits will be able to generate $6 billion in remodeling activity through next year, which was the fed’s original estimate.

The report doesn’t dig into how much remodeling activity the credits have delivered to date, but it took a look at other indicators like a building index and various media reports. One reason for less-than-stellar growth is the structure of the tax credits, says Matt Golden, president of home energy retrofitter Sustainable Spaces. If you purchase energy-saving windows, roofs and heating systems, you are eligible for tax credits that are worth 30 percent of the cost of the purchase, up to a maximum of $1,500. But the bulk of the cost of a home energy retrofit is for labor, for which the tax credits don’t apply.

The stimulus bill favors solar PV and other more expensive renewable-energy technologies over energy efficiency home retrofits, Golden says. For example, residential rooftop solar systems are eligible for 30 percent tax credits with no upper limit.

Read the full post here: www.earth2tech.com/2009/08/31/energy-retrofits-not-so-stimulated-by-stimulus-bill