A number of recent studies show that homeowners are more interested in energy efficiency than ever before. Add in available energy rebates and financing, and contractors have what seems like a sure-fire way to grow leads and sales.

That’s what happened for Phil Isaacs when he started offering rebates and financing. “It’s a good hook,” says Isaacs, owner of California Energy Consultant Services. “Everyone is interested in saving money in their home, especially when there’s rebate incentives involved.”

Energy incentives come from a variety of sources: local and national government agencies, utilities and finance companies that offer special deals on energy upgrades, and even product manufacturers. Contractors should check with their local utilities for any rebates or other incentives they may be offering for energy efficiency improvements, said Brian Ng, Energy Star communications manager.

Here is a list of energy incentive sources:

  • Energy Star: a U.S. Environmental Protection Agency (EPA) voluntary program that helps businesses and individuals save money and protect the climate. energystar.gov/homeperformance.

  • Offers and Rebates from Energy Star partners: This site gives a rundown on special offers, such as sales tax exemptions or credits, or rebates on certified products. http://www.energystar.gov/rebate-finder?s=mega

  • Available Federal Tax Credits for Energy Efficiency and Renewable Energy: This site offers a list of tax credits for various products. http://www.energystar.gov/about/federal_tax_credits

  • Database of State Incentives for Renewables and Energy Efficiency: DSIRE is considered the most comprehensive source of information on incentives and policies that support renewable energy and energy efficiency in the United States. Established in 1995, DSIRE is operated by the N.C. Clean Energy Technology Center at N.C. State University and is funded by the U.S. Department of Energy. http://www.dsireusa.org/

But there’s a lot more to offering energy rebates and financing than knowing simply which web site to search, said Robert Hamerly, principal with GreenSavers USA. “Contractors need to walk into this with their eyes wide open,” he said. “Sure you can use those incentives as a sales tool, but because we’re working with these programs, we actually have to make business modifications.”
For example, Hamerly said most incentives require a lot of documentation to prove the job meets the rebate specifications. So he’s had to increase his administrative expenses and change his production department to address new policies and procedures. Most programs in Isaacs’ area require credentials from the Building Performance Institute. He’s also required to complete a job every six months to stay on the local utility’s list of certified contractors.  

“A lot of guys just don’t want to jump through those hoops,” he said.

Hamerly added that customer expectations must also be managed around incentives, since many have unrealistic about what rebates cover, typically 10 percent to 15 percent of the project cost. “These programs are going to help you get your new windows. They’re not going to pay for your new windows,” he said.

But making those effort has been worth it for Isaacs. He said he enjoys a competitive advantage over other contractors who don’t offer incentives. His company is also listed on the web sites of the banks and utilities he’s associated with, which leads to good leads.

He also says that even small rebates can make customers spend more on projects. Rather than an average of $8,000 to $12,000, Isaacs’ jobs now average between $25,000 to $30,000. “Our sales guys are just killing it,” he said.

Besides, he added, with customer demand growing every year, it’s only a matter of time before energy efficiency expertise, and the accompanying incentives, will be expected from all contractors. “Five to 10 years down the road, you’re not going to be a player unless you’re into it,” Isaacs said.