Latest tax bill leaves energy efficiency, remodelers out in the cold

December 13, 2010

It's not getting a lot of attention in the partisan bickering over the tax compromise in Washington last week, but remodelers hoping for an extension of the energy efficiency tax credits look to be the big losers.

The credits (for windows, insulation, etc.) set to expire at the end of this year are being extended -- but at the much lower pre-2009 levels of 10 percent of project cost, capped at $500. Credits for window replacement are capped at $200.

$200 isn't going to make anyone replace their windows. At that price point, why bother having the credit? Many people say the expiring credits didn't create demand; that they only rewarded those who were already undertaking a project. There's no doubt that would be the case with these credits.

It's a waste of money, plain and simple. Either make the credit worthwhile, or get rid of it and spend the money on something else.

Jonathan Sweet is the editor in chief of Professional Remodeler, an award-winning trade publication for remodelers and home improvement contractors. He started his career covering homes and small businesses at a daily newspaper and has spent more than a decade writing for several construction trade publications including Qualified Remodeler, Construction Pro and Concrete Contractor+Jonathan Sweet