| Tax Credits Proving Less than Effective |
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Tax credits are so far unable to jumpstart the market for home-energy efficiency retrofits. Homeowners, pessimistic about the economy, are not spending the thousands of dollars required for such work, even when they know it will save them money in the long run, according to a research report. As the economy improves, however, energy retrofits should, too, regardless of tax credits. The structure of tax credits in the American Recovery and Reinvestment Act for home-energy retrofits may have something to do with the act’s “lackluster” effect on the home energy retrofit market. It’s been “small but positive,” says researcher Canaccord Adams, in another Reuters article. For energy-saving window, roof, and heating system purchases, credits can cover 30% of the purchase, up to $1,500. But the bulk of the cost of a home energy retrofit is for labor, the article says, which the tax credits don’t cover. It also questions whether the credits will be able to generate the $6 billion in remodeling activity projected through next year, the fed’s original estimate. The stimulus bill favors the installation of solar photovoltaics and other expensive renewable-energy technologies over energy efficiency home retrofits. Nonetheless, spending on home remodels is rising slightly, researchers say. In addition, homeowners who are remodeling are beginning to add in energy-saving features, in contrast to the past. |
