Bob Davis has a warehouse filled with windows, a booked-solid calendar of home improvement jobs and has even hired a third crew to help him complete installation projects before January.
With several lucrative U.S. Department of Energy tax credits set to expire in January, many cost-conscious homeowners are scrambling to get efficiency projects scheduled before the New Year’s Eve deadline. As a result, demand for new window installation projects at Capitaland Home Improvement has been so large that Davis, the company’s president, almost considered working through the Thanksgiving holiday.
“We can’t promise any more dates,” he said Wednesday. “We’ve even booked the week between Christmas and New Year’s.”
Window replacement is among the more affordable projects covered by the federal Home Energy Efficiency Improvement tax credit, a program funded through the American Recovery and Reinvestment Act. Other items include certain types of roofs, insulation, biomass stoves, water heaters, home heating units and doors.
Homeowners who embark upon select energy efficient home improvements can save up to $1,500 or 30 percent of the total cost of the project, provided they can be completed before the credit expires. Those projects that are not finished by Jan. 1 will not be eligible for the credit.
Davis said the homeowners calling Capitaland these days are keenly aware of the soon-to-expire credit. Most preface their calls by asking if his workers can complete the job before the deadline.
“That’s the first thing on their mind,” he said.
The National Association of Home Builders has been urging homeowners to act on potential improvements now before the credits sunset. Chairwoman Donna Shirey said her organization will continue to push for an extension and expansion of the energy-efficiency incentives because such credits help both the economy and the environment.
“We understand that there are trade-offs and budgetary considerations for all these programs,” she said in a statement. “Tax credits can take advantage of the existing administrative infrastructure — the Internal Revenue Service — to immediately get off the ground.”
Also expiring on New Year’s Eve is an automobile tax credit for hybrid gas-electric and alternative fuel vehicles. Until then, individuals and businesses buying or leasing select vehicles are afforded a tax credit of varying size that is largely dependent on the automobile’s fuel efficiency.
But the credit has already been partially phased out for a number of manufacturers, in particular the ones that sell the more popular fuel efficient models. Once that company has sold 60,000 eligible vehicles, the tax credit is reduced over the course of 15 months.
For instance, Toyota Scion of Clifton Park stopped offering the tax credit for its Prius model nearly four years ago. Christian Trujillo, a general manager at the dealership, said the lack of a credit hasn’t been much of a factor for sales, which seem to spike dramatically whenever the price of gas creeps toward $4 per gallon.
“We had [the credit] and it was great,” he said. “But at the end of the day, our customers aren’t buying them for the tax credit.”
U.S. Rep. Paul Tonko, D-Amsterdam, said the credits offered by the stimulus bill have been popular and have largely accomplished the intended goals of generating business and improving energy efficiency. The former president and CEO of the New York State Energy Research and Development Authority said many small businesses are advertising the credit and using it as a way to bolster sales in the sluggish economy.
“Is it working? I’d say absolutely,” he said.
Although there’s no guarantee the credits will be extended, Tonko said he and his colleagues in the Capitol are discussing how to build upon the successes of the economic stimulus programs. While acknowledging that the political and economic climate has changed, he said both of the expiring credits have positive elements that could be employed in new programs.
“Certainly, we’ll see what discussions arise at the start of the New Year,” he said. “I think both of these will be reviewed thoroughly so we can do what is best for taxpayers and energy consumers.”
At Capitaland, Davis is hoping federal legislators see the value of the credits. His normally robust business exploded this fall as a result of the program.
“It’s great for business, it’s great for saving energy,” he said, “If the government has any handle on it, they should extend it.”