• Letter to the Editor: ACCA Positionon Homestar Bill Is Ill-Advised

    Aug. 31, 2010
    The CEO/President of The Linc Group expresses opinions regarding the state of negotiations related to the Homestar legislation.

    To the Editor:

    I must take considerable exception to ACCA’s posturing on the pending Home Star legislation. Many of ACCA’s claims in recent communications to its members, legislators, and the press are not accurate in terms of policy outcomes, its positions are ill-advised for swift adoption of Home Star, and their rhetoric jeopardizes enormous potential incentives to boost the sagging residential HVAC industry. These efforts by ACCA are likely to hurt rather than help not only its members, but also the industry and the economy at large. ACCA continues to focus on two critical points; the rebate mechanism and contractor accreditation. We are convinced that removing accreditation will kill the bill, because we’ll lose critical support in the administration and Congress. Also, we believe that the direct-to-consumer rebate isn’t politically or administratively feasible, cost-effective, or necessary to the success of the program. We believe that fighting Home Star on these two points will likely result in defeating this legislation which is so critically important to our industry, our nation’s economy, and the strategic imperative we all face to end dependence on foreign energy.

    Accreditation Not a Stumbling Block
    Specifically, to the first point on certification, ACCA is correct that BPI Accreditation—or any other comparable program approved by the Secretary of Energy—is required under the smaller Gold Star program. Just as a license and appropriate experience and training are required to become an expert air conditioning contractor. Certification is about consumer protection, and maintaining the integrity of a nascent industry which we believe is the natural evolution of the residential HVAC business. Accreditation includes safeguards beyond certification, including an agreement to work according to established standards at the company level, not at the technician level. The unfortunate reality with billions of taxpayer dollars on the line “We’re contractors, just trust us” isn’t good enough. For some unknown reason ACCA steadfastly ignores the fact that the legislation does not preclude ACCA or anyone else from stepping up with a company-level accreditation program—something we’d in fact encourage—and something specifically called out in the bill.

    Furthermore, ACCA’s concern about BPI Accredited contractors being predominant in only two states offers a real world example that counters their argument and which should put their objection to rest. In states with programs and incentives, incentives lower than those anticipated under Home Star, contractors have shown that they are willing and able to get accredited. The same is true across the country. For example, while GreenHomes America, a Linc Group company, is not yet accredited in California, we meet all the requirements and would immediately become accredited on passage of Home Star. We know many other companies across the country would do the same, which should be self evident.

    Contractor-based Rebates Won't Hurt Responsible Companies
    ACCA claims that the proposed rebate structure in which a contractor passes an upfront discount directly to the consumer and is then reimbursed, is unworkable. They state that contractors will be worried about how quickly they will see revenue from the work they do under this bill. To make direct to consumer rebates an insurmountable obstacle to passing this legislation is foolhardy at best. Just as importantly, ACCA seems to be ignoring practical realities. The current Administration and Senate examined the direct to consumer rebate model and determined it wasn’t practical or cost-effective to create yet another Federal infrastructure to support millions of rebate claims. When the government doesn’t want to create a new bureaucracy, the argument should be rendered moot. Their point of view is that this is most efficiently accomplished by leveraging existing infrastructure, including program implementers, large retailers, and utilities, which already have the infrastructure in place. While we are as concerned about cash flow as any business, we anticipate that the rebate will account for approximately 20% of the cost of the typical qualifying HVAC project. Covering this relatively small amount for the 30 days detailed in the legislation should fit well within the means of fiscally responsible contractors. We think this is an efficient, effective, and market-savvy way to encourage homeowners to participate in the program.

    Don't Allow 'Perfect' to Be an Enemy of the Good
    All told, of the $6B contained in the bill, we expect between $3B and $4B of incentives to flow to the HVAC industry. ACCA’s opposition risks losing it all. That means HVAC contractors would miss out on $3.5 billion in homeowner incentives that we’d be likely to capture if Home Star passed. While our overall economy continues to struggle, and unemployment in the building trades hovers stubbornly around 30%, efforts like ACCA’s hold mythical perfection to become the enemy of good. We as an industry need to support this bill and not allow the efforts of a professional lobbying organization to hurt HVAC contractors across the country. Having helped to birth the Home Performance Contracting industry many years ago, we speak from a position of experience with empirical data to support our position, not conjecture and opinion.

    We strongly urge ACCA to support Home Star before the window of opportunity closes for 2010.

    Very sincerely,

    Tracy K. Price CEO & President
    TLG Corporate
    The Linc Group
    Irvine, CA