Energy costs are on the rise and driving renewed interest in energy efficient products. Most understand the long-term savings from reduced energy usage, yet may be a bit hesitant to spend a lot upfront to get to those savings. Companies can help customers get over this pain point with tax incentives. The average homeowner may not know how to take advantage of these incentives, making this a great opportunity for contractors and builders to step in and lend a hand.
Energy efficiency tax credits and rebates are great for contractors because they lower the overall cost of the project for the homeowner without cutting into your own margins. Helping a customer navigate incentives also builds trust, sets you apart in service, and ultimately leads to higher customer satisfaction.
Here are some tax credits that could save homeowners $500 or more in project costs, as well as ways you can guide your customers through the process.
Tax Credit #1: Solar-Power for Homes and Offices
Solar energy is increasingly popular, especially as the cost of solar panels has become more affordable in recent years. Until the end of 2022, the U.S. government will offer a 26% federal tax credit for solar panels, with continued rebates (although slightly reduced) until 2024.
If you install solar panels or offer contracting services for solar installation, start by providing rebate information in your marketing materials. You can refer customers to Energy Star’s website, a great, up-to-date resource, or provide the information directly on your site. For example, Ecohouse Solar has great information about federal tax credits it’s sending out in email campaigns.
Marketing Tip: Create urgency with a “Rebate Countdown” clock on your website and on social media to prompt customers to act before the rebate reductions go into effect.
There’s opportunity for heating and plumbing companies as well, since rebates aren’t limited to just solar panels. Solar related products, such as solar water heaters, qualify too, as long as at least 50% of the energy generated comes from the sun and the water is used inside a residence.
Tax Credit #2: Home Improvements on Hold
Up until December 31, 2021 when the rebate expired, homeowners qualified under the Equipment Tax Credits for Primary Residences if they installed energy efficient insulation, roofs, HVAC systems, water heaters, roofs and more often costly home improvements. A renewal for this tax credit is pending before Congress and if renewed, could prompt homeowners who want new or replacement insulation in their existing home to take advantage of the credit while it lasts.
Marketing Tip: If you sell insulation or any of these qualifying products, use the incentive to build trust and show you have their best interests in mind. Send an email alert to your list of leads when the rebate renews. By calling out the cost savings when it becomes available, you show prospects you’re thinking about them beyond the showroom or sales visit.
“Energy efficiency rebates can be an important part of the homeowner’s cost equation,” said Matt Samson, building industry advisor. “Yes, they often can be earned despite which contractor did the work. Many contractors keep their hands clean of the paperwork involved, and simply forward the homeowner to a website – but this presents a great opportunity for you to build trust and value by assisting in guiding them through the process. Show you’re not just about the sale and install, but the customer’s ongoing satisfaction to earn loyalty and referrals.”
Helping Customers Apply
To take advantage of tax credits, homeowners must fill out Form 5695, submitted with their tax returns. These forms are never easy, so as an additional service, provide a guide to get them started, similar to this one created by Unbound Solar. It’s a great way to go above and beyond typical building services for minimal time and investment. Of course, you’re just there to provide advice. Always recommend customers review any rebates with a professional tax preparer.
Consumers seek good service, quality and affordability. Highlighting your willingness to spend extra time so that customers can save on their taxes delivers what customers want and helps your company stand apart.