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Cash for Caulkers clunks among contractors

By Caley Clinton

Proposed federal rebates for home energy projects mean dollar signs and more work for insulation and window companies.

That’s not good for business, said Dean Johnson, who predicted the dollars would float away from his company as he works harder to jump through regulatory hoops. Johnson, owner of Madison-based Johnson Insulation Industries, has several concerns with the Home Star Act, also known as Cash for Caulkers, which is awaiting action in the U.S. Senate.

The legislation would free up as much as $6 billion through homeowner rebates for insulation, window and door retrofits to an estimated 3.3 million homes.

But the potential work created by such incentives might not be worth the effort it will take to obtain certification required as part of the proposed legislation, Johnson said.

“Anytime you ask about further certifications for businesses it means, to me, more fees and more costs,” he said.

As proposed, the legislation would require contractors doing work eligible for rebates be certified by a third party training outlet such as the Building Performance Institute, North American Technician Excellence, the Laborers’ International Union of North America or the Home Builders Institute.

Such certifications cost money, said Lee Duerst, owner of Duerst Insulation Technicians Inc., Dane. For his employees to get certified in a four-day training program, it costs $600 per employee, he said. And that’s not including the cost of losing employees in the field during that time, he said.

“As a contractor,” Johnson said, “we always have to weigh our investment versus what we think will be the increased market for this type of work.”

LIUNA spokeswoman Jaclyn Houser said the certification and quality assurance requirements in the bill ensure quality jobs are created.

“It’s not just about creating jobs, it’s about creating good jobs,” she said. “That’s our stake in this.”

Duerst supports the certification requirement because it would “level the playing field,” eliminating uncertified contractors he calls “show and blow guys.”

“The certification — yes it costs money at a time when small business owners are really struggling, but it’s a step in the right direction,” he said. “It encourages correct certification.”

But the better approach, Johnson said, would be through a state or federal program that provided uniform training.

“Then we’d have cohesiveness among the contractors,” he said, “instead of different certifications from different associations.”

The problem is not so much the cost to contractors as it is willingness of customers to pay up front, Duerst said. He said work likely would increase in the market if the rebates were instantly available for customers.

“If they allowed us to offer that rebate at the point of sale, that would push things in a positive direction,” Duerst said. “It gives us something to work with.”

While about 15 percent of Duerst’s customers understand they will get a return on their investment, he said, the majority consider it a risk. The remaining potential customers won’t even bother if the rebate isn’t immediately available, he said.

With the state of today’s market, Duerst said, the legislation might not do much good because many customers aren’t interested in investing in home improvements when money is tight. Business at his company has been really slow this summer, he said, even compared to last year.

“People are just not spending any money,” Duerst said, “even if it’s going to help them.”

New Orleans CityBusiness staff writer Jennifer Larino contributed to this report.

3 comments

  1. This article does not properly represent the true facts about Home Star. There is the assumption that all retrofits require certified staff and contractors. This is NOT TRUE. The legislation establishes a Silver Star path that does not require any certification or accreditation. It gets 2/3 of the funds. The Gold Star path does require certification and accreditation because it requires a higher level of skill and responsibility. It gets 1/3 of the funds. There are no added barriers to participation in the program that are not reasonable and easy to comply with. I know, as a member of the Home Star Coalition, that we need to move this plan through Congress. 168,000 unemployed workers getting a new job is proof that this legislation will put Americans back to work.

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