President Bush gave energy efficiency a nod when he signed the Energy Policy Act in April 2005. But one year later, some builders and home buyers are confused about their eligibility to receive tax credits for using energy-saving materials in new-home construction and renovations. “There's a lot of misinformation,” observes Gale Tedhams, a product manager with Owens Corning. “One builder we spoke with thought that he didn't qualify because he's not installing a solar water heater.”
To help builders tap into this tax break, which allows up to $2,000 in annual deductions when materials and construction practices exceed local energy codes by 50 percent, Toledo, Ohio–based Owens Corning has developed a software program called the Builder Energy Solutions Calculator, which the supplier showcased at the International Builders' Show. The calculator projects what builders must do, when installing insulation, to meet the criteria to get to the tax credit level. The supplier is offering the calculator gratis to contractors that install its pink fiberglass insulation and foam products.
Bill Rossiter, the company's director of marketing for insulation systems, concedes that builders might need to spend more on construction to obtain the tax credit than the credit itself is worth. But knowing this can help builders job-cost more accurately. And the calculator could become a marketing tool by showing home buyers (who can qualify for $500 in tax credits for energy-efficient upgrades) how these materials, which add marginally to their monthly mortgage payments, can save them more on energy bills over the long run.
Jay Murdoch, Owens Corning's technical marketing manager, says that some builders are already petitioning their HBAs to lobby Congress to extend the tax credit beyond 2007, when it expires.
Learn more about markets featured in this article: Toledo, OH.