Lemon or Lemonade?
Dealers Say Tax Credits are a Mixed Drink of Success
by Katie Hodge
Bruce Johnson doesn’t expect much to come from the tax credits. His San
Francisco-based business, Professional Window Tinting, focuses on commercial
jobs to pay its bills. He doesn’t see the tax credits having enough of
an effect on the residential market for him to spend time and energy promoting
them. Though Johnson agrees that “any type of incentive is a positive
thing” he chooses to focus his attention on big commercial projects.
Back to Basics
In an effort to encourage homeowners to make their homes more energy-efficient,
a window film provision was added to the American Recovery and Reinvestment
Tax Act of 2009. Under the new policy, homeowners who have film installed
by December 31, 2010, can earn a tax credit of 30 percent of film cost
with a maximum total credit of $1,500, up from the previous cap of $500.
“I think the tax credits will expand the residential market
because it’s never been heavily marketed by the manufacturers,” says Peter
Mott, owner of Sunmaster in Napa, Calif. “The marketing material now is
promoting energy efficiency much more extensively than it used to.”
While the interest is there, the tax credit, it seems, has yet to make
a significant impact for most dealers. Some say there have been cases
where a customer has come in to solely “green” their home and obtain the
“The tax credit helps raise awareness of the benefits of window film,”
says Jared Gray, owner of Pacific Window Tinting Inc. in Portland, Ore.
“While it hasn’t necessarily brought new business in, it does help close
deals. Just [recently] I closed a deal by discussing with the homeowners
how they could use the tax credit to save money.”
Some dealers say they have seen little impact. “While any type of incentive
is always a positive thing, we are seeing that the bar is too high for
what people would realistically do to their homes,” says Johnson. “In
our market, people are just not that concerned about that kind of thing.”
Educating homeowners about the benefits and long-term savings of investing
in energy efficient window film for their homes is a way for dealers to
peak interest. Dealers can implement educational marketing techniques
for their customers. The more talk there is about window film, the more
likely a homeowner is to consider window film when they are ready to “green”
Promoting the tax credit is often a joint effort. Manufacturers also provide
dealers with all the information they need to promote this film.
“We train our dealers, send out reminders, and promote on the website.
We are going to be revamping and updating our online courses to help keep
them informed. At the end of the day we know dealers are using it as a
sales tool,” says Kathryn Giblin, vice president of global marketing for
Bekaert Specialty Films in San Diego. Additionally Bekaert is involved
in the International Window Film Association’s (IWFA) Window Film Committee
which consists of Bekaert Specialty Films, 3M, CP Films, Hanita Tek and
Johnson. The IWFA committee “has committed and put resources toward lobbying
for improvements in the tax credit and toward window film being included
in HOME STAR and Building STAR programs,” adds Giblin. Companies such
as Hanita Tek have included tax credit information on their website for
consumers and dealers including step-by-step instructions on obtaining
the tax credit, government links, and a climate zone map. CPFilms also
has a section of its website that is solely dedicated to the tax credits
with explanations of why window film can make a difference to consumers
and downloadable forms for both customers and dealers. These types of
tools can make a big difference in maintaining knowledge on the tax credits
as well as helping dealers close the deal when promoting window film.
Two of Gray’s biggest challenges are educating his customers about the
reasons window film can make a difference in their homes as well as staying
aware of all the changes and new developments concerning the tax credit.
“Some customers are more familiar with the tax credits than others,” says
Gray. “What a lot of homeowners aren’t aware of is that they can spend
up to $1,500 and the money can be used toward multiple energy-efficient
improvements. We mention tax credits to every potential customer. We use
the information our suppliers provide us, whether from the newsletters
or conversations with our sales rep, to stay current on the tax credits.
That way, we always walk into a sale with all the knowledge we need to
explain the benefit of the tax credit to the homeowner and close the deal.”
Mott hopes to see changes made to the current legislation. “We promote
it [tax credits] a little bit. We haven’t seen it be particularly successful.
We’re hoping some of the legislation coming up allows for a greater amount
of the cost to be covered,” he says.
There are things that dealers can do to boost the tax credits and their
effectiveness like staying informed and up to date as Jared Gray does
or joining in the lobbying effort. Giblin explains, “Each manufacturer
will be calling their dealers to get involved. We need the dealers to
help manufacturers push the industry. When they get that call to write
that letter, they need to do it.”
“I think it will be tough residentially. It will still be affected by
the economy for the next few years and it will take time until money is
more available, but commercially, even in tight markets, they [customers]
have to look at ways to continue to lower their costs,” says Mott.
“Anytime window film is recognized it adds legitimacy to the industry.
We have no doubt that it will enhance our business. In terms of numbers
we have no idea what they will look like right now,” Giblin adds.
While the tax credits might be slow to catch on, the general outlook seems
to be positive. Everyone sees growth and everyone sees potential.
Gauging the Commercial Market
Commercial customers buy higher quantities of window film for use in
applications that are much bigger than most homes. And, because the volume
of film they buy is so great, it’s also a cost-effective purchase. Now,
with growing emphasis from government agencies and some consumer groups
to “go green” and increase energy efficiency, an increasing number of
businesses are employing window film for their buildings, offices and
other properties to try and save a few dollars on both their energy costs
“In terms of dollar amounts, commercial customers stand to benefit more
from energy efficient window film because their energy usage is so much
higher,” says Jared Gray, owner of Pacific Window Tinting Inc. in Portland,
Peter Mott, owner of Sunmaster in Napa, Calif, adds, “We expect the
commercial market to continue to grow as utilities rates keep climbing.
We are starting to see large commercial tenants demanding that that buildings
are Energy Star® rated or Leadership in Energy and Environmental Design
(LEED) certified. One of the real easy ways to get LEED points is from
window film, so we expect that market to keep growing over the next four
or five years.”
Others, like Bruce Johnson, owner of Professional Window Tinting in San
Francisco, remain optimistic and focused on the commercial industry. “If
you’re not optimistic you might as well get out now. The large buildings
are always out there and always in need of help.”
Katie Hodge is a contributing editor for Window Film magazine.
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