Roofing: Tax credits can offset upgrades to energy-efficient metal and asphalt roofs

From mechanical equipment in the basement to insulation in the walls, there are plenty of opportunities for homeowners to invest in building products that will help them earn tax credits.

At the top of the list, in many situations, are high-efficiency roofing materials. But when competition for business arises among the trades for other tax credit–eligible product categories, roofing contractors are finding that proactively educating customers on cost-saving opportunities is essential.

Clear Communication

“Jobs are often coming in because homeowners have a problem with their roof,” says Bill Wade, president of Affordable Roofing, in Aurora, Ill. “They don’t know that the credits are available, so we have to educate them, while we’re looking at the job, that they can get a tax credit if they’re willing to make an upgrade.” Wade’s colleague Ron Pugmire, who manages the blog RoofInfo.com, adds, “the early bird catches the worm here. Whoever gets to the consumer first wins the prize of getting them the credit. Once the credit is tapped out, you lose it as a bargaining chip in future sales.”

Contractor Mike Conte agrees. Conte Remodelers, in Marion, Ohio, installs windows and siding, and handles other major remodeling projects in addition to roof installations. “We haven’t seen as great a surge in business because of the $1,500 in roofing as we have seen on windows,” he says. “But about 25% of the roof installations we’ve done so far this year will qualify for the tax credit.”

Conte says that other roofers in his area don’t seem to be advertising the opportunity, while his company uses print ads and fliers, as well as a page on its website, to disperse information and drive traffic at their home and garden shows. He thinks some remodelers may hesitate to discuss tax credit–eligible products for cost reasons. Cool shingles, for instance, will cost more than standard shingles, thereby increasing the price of a roof, and potentially turning off a customer.

“We’re finding that’s not true,” Conte says. “Our presentation to a new client lasts about 90 minutes and includes a lot of information about the different levels of product quality that are available. When it comes to the Energy Star products, we tell [homeowners] it will typically add $3,000 to the price, but that Uncle Sam will pay for half of it, and with the energy savings, they’re likely to see the rest of their return within four years. Over time, the upgrade comes at no cost.”

In addition to homeowners seeing the opportunities with roofing tax credits, Conte says that his sales staff is equally eager to discuss the topic. “Roofing is not normally a luxurious job to talk about,” he says. “This has excited our salesforce because we have something fun and exciting to talk about with our customers.”

A Reason to Re-Roof

Manufacturers are also enthusiastic, as new American Recovery and Reinvestment Act (ARRA) legislation may inspire homeowners to upgrade their roofs because they want to — not because they have to.

“Overall, the new stimulus package and corresponding tax credits will help make consumers more aware of both the economical and environmental benefits of incorporating energy-efficient building materials into their home’s exterior,” says Edward Thomas, vice president and general manager of Follansbee, a metal roofing manufacturer.

Representatives from Follansbee, CertainTeed, GAF, and other manufacturers have noted that interest in eligible cool-roof products is increasing, and that plenty of inventory is available to satisfy the demand. —Lauren Hunter, associate editor, REMODELING.

Bottom Line

For the purposes of the 2009 ARRA tax credit legislation, qualified roofing materials include metal roofing and asphalt shingles treated with coatings or cooling granules specifically designed to reduce heat gain.

Materials must be “placed in service” between Jan. 1, 2009 and Dec. 31, 2010, and must be expected to last for at least five years.

Taxpayers may claim only materials costs for the tax credit. Labor is not included. All eligible products must meet Energy Star requirements for roofing materials, and all Energy Star roofing materials in the metal and asphalt categories qualify.

Local Look: States Weigh In

CALIFORNIA:The Sacramento Municipal Utility District (SMUD) is offering customers who install cool roofs a rebate of up to 20 cents per square foot for flat roofs or 10 cents per square foot for pitched roofs.

The roofing material used must achieve 0.75 solar reflectance and 0.75 emissivity for flat roofs, and 0.4 reflectance and 0.75 emissivity for steep-slope roofs. These requirements exceed Energy Star requirements, and are higher than what is needed to claim the federal tax credit.

In claiming the rebate, home­owners will submit a form to SMUD, which will then reimburse the homeowner via the contractor. Homeowners can also take advantage of SMUD financing opportunities to have the work completed. —Lauren Hunter

Doing It Right: Steep- and Low-Slope Options

The energy efficiency of reflective asphalt shingles and metal roofing is built into the products themselves. Manufacturers say that installation for these materials is the same as with standard roofing products and advise contractors to follow manufacturer recommendations for installation.

Bill Hippard, president of the Metal Roofing Alliance, notes that metal roofing can be installed over existing shingle roofs, eliminating the waste created by roof tear-outs. “Metal roofing has a misperception of being very heavy,” Hippard says. “It’s actually one-third the weight of an asphalt roof in many cases. And by installing metal over an existing asphalt roof, it can be very environmentally friendly. It’s estimated that 22 billion pounds a year of asphalt shingles are put into landfills.”

With respect to the new legislation, upgraded roofing carries a green message, since a properly installed energy-efficient roof can reduce a home’s heating and cooling requirements. However, one aspect of the ARRA legislation that is not clear is whether other types of cool-roof products qualify for tax credits. Manufacturers GAF and CertainTeed, as well as many others, supply rolled roofing materials such as TPO membranes and other cool-roof products for installation on flat and low-slope roofs. The materials, which are often white, can be highly reflective and reduce roof and attic temperatures.

Because the legislation specifically calls out asphalt shingles and metal roofs, industry organizations such as the International Code Council, which developed the International Energy Conservation Code, say that those are the only categories eligible for the credit of 30%, up to $1,500.

That said, Diane Gola, marketing communications manager for GAF, recommends visiting the Resources page of the Cool Roof Rating Council’s website at www.coolroofs.org. The site’s Codes & Programs page lists states where local tax credits or utility rebates may be available for cool-roofing materials beyond the asphalt shingles and metal roofing products outlined by the ARRA 2009 legislation. —Lauren Hunter