With tax credit, consumers give turbines, solar panels a second look

Another company already seeing the effects is TAG Mechanical Systems, based in Syracuse, N.Y. With consumers sobered by the economic climate and armed with new reasons to improve energy efficiency, company vice president Ellis Guiles says he’s seeing “a shift away from the ‘sizzle’ upgrades like granite countertops and wood floors to things that will add value to a house and lower utility bills.”

Sales of on-demand water heaters are up, and more people are insulating and sealing drafty homes.

TAG Mechanical’s sales are up 10 percent so far in 2009, due to both the federal credits and New York State incentives for energy-efficient home improvements. The company is projected to grow by 15 percent this year and may add new employees, if sales are strong enough, Mr. Guiles says.

Also optimistic is Andy Kruse, senior vice president of Southwest Windpower, the company that manufactures the wind turbine that caught Cooper’s eye. Southwest Windpower had a strong 2008, although sales dropped off after the new year, he says: “There was so much uncertainty. We saw the stock market dropping and dropping. There was a sentiment of fear, and consumer confidence dropped off like a stone.”

But after the stimulus legislation removed a cap on the credit amount for renewable energy products and installation, things have been looking up for the company. Orders have again reached last year’s strong levels, Mr. Kruse says, and he thinks they’ll double by the end of 2009. “We’re projecting that between what is in the stimulus package and consumers’ continued belief in renewables, we’re going to see a really good year despite what is going on in the economy,” he says.

The small-wind-power industry as a whole is projecting a 30-fold increase in sales over the next five years, and much of that is due to the stimulus plan, says Ron Stimmel, small-wind advocate for the American Wind Energy Association, a trade and advocacy organization in Washington.

But others are less convinced that the tax incentives will be enough to get consumers spending again. “When you’re looking at the general unemployment rate, people don’t have the money to spend whether they get a tax credit or not,” says Kevin Schwalb, director of government relations for the Plumbing-Heating-Cooling Contractors Association, which represents about 5,000 businesses nationwide.

“I understand the whole concept [of the stimulus], but in the current economic situation, it’s going to take a lot more than a few tax credits to get the economy rolling again,” he says.

Though he hasn’t yet seen a “tremendous surge,” says Craig Perkins, executive director of the Energy Coalition, a nonprofit in Irvine, Calif., more sales and jobs will be created once the government’s funds start flowing. “The people actually doing the work – doing the weather-stripping, tuning up the heaters – are contractors hired by [the state or] community-based organizations,” Mr. Perkins says. These contractors will probably have to hire and train new people to meet the additional demand, he says.

Back at the home show, Charlie Shaffer sits among a small crowd waiting for a presentation on wood-pellet stoves. He’s looking to make a number of upgrades to his home in Brunswick, and the tax credits mean higher-end, more-efficient products are suddenly within reach. “They’re turning products I wouldn’t have been able to look at a few months ago into viable alternatives,” he says.

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