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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 tax credit.

“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.”

Making Lemonade
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” their home.

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 and consumption.

“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, Ore.

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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