Effects of the new Stimulus Package

[louiee]

The question is for all those who sell, and install new residential systems. Wheather it be GEO, ASHP, AC, PTAC or what ever,

What effect in product mix do you expect to see in the months ahead due to the tax credits offered in this Bill?

Is the credit offered for the higher SEER units going to make a difference in mix?

Have you seen changes in the consumer from (First Cost) to (Total Cost) when a purchase decision is made?

Have you seen much of a reaction from the end users?

Have you or your organization used this credit as an up sale technique? What has been the outcome?

I am rather new to this forum and work for a major supplier to the industry. Would it be possible to set up a pole Where all the pros on this forum could indicate where they see the market going? Ie. (13 SEER, 14 SEER,) ect.

I have proposed these same questions to all the major OEM with varying responses. My goal is to see if those of you in the field have the same feelings. My assumption is that those on this forum are closer to the point of sale and will see/hear the effects much quicker.

Your help is greatly appreciated.

Louiee

[udarrell]

What; no one has an opinion?
If you use the energy conservation movement intelligently enough that should help boost your sales & service work.

Most duct systems are very inefficient due to improper duct sizing, filter rack sizing, air leaks & supply Air problems including improper diffusers, etc.
Contribute your ideas & opinions; it is time for everyone to go to work.

[Mr Bill]

Louie, how many 4 and 5 ton systems do you sell that will qualify for the 13 "EER" Tax Credit requirement?

[BaldLoonie]

We are getting results with it. Selling a lot of 95% 2 stage variable speed furnaces. Also with low juice rates, anything above 13 SEER is hard to justify though we did sell some 14s for the electric company rebate. Now we are moving 15s to get the credit. It is hard to find a larger unit to qualify though did do a 4 ton 15 SEER pump Friday that did.

[Mr Bill]

We are getting results with it. Selling a lot of 95% 2 stage variable speed furnaces..

See to me this is Government discrimination, you will never sell a 95% in Houston unless your the biggest BS'er on earth. Also we sell a lot of 4 and 5 tons systems, how many of those qualify for the 13 "EER" rebate? they should have just told us down here to go jump in the lake,that would have been nicer, why beat around the bush?

O I forgot, Thanks! Mr. Obama.

[motoguy128]

I definitely think the "All or nothing" approach to rebates is a little unfair. I'd rather see 2 or 3 tiers of credits for different efficincy levels. Give everyone an opportunity to improve their energy effiecincy.

[noobs]

This is just my speculation, but I think some bureaucrat hiked up the standards almost arbitrarily when they increased the tax credit as a quid pro quo. If they wanted to cause confusion, they sure did. Not all energy star set ups qualify and virtually nothing does in 4 ton and up for split systems. I am now looking for a 95% furnace to qualify for the credit, but this is bad for warm climates.

If they really wanted to stimulate demand, business, and jobs for the industry, they should have kept the existing guidelines and raised the tax credit.

I spoke to a contractor that is quoting me a system and he was not aware of the new rules. I stepped him through the energy star and CEE web sites and Tier 3 efficiency. He was very appreciative. I guess having irate customers call in a years time when the tax credit is denied is not good for business.

We can only all hope that the stimulus slows down what is happening and starts to reverse it:

United Technologies to Cut 11,600 Jobs Worldwide

By Edmond Lococo
March 10 (Bloomberg) -- United Technologies Corp. plans to cut 11,600 jobs as the global recession and credit crunch lead to lower sales and profit than previously projected by the maker of Otis elevators and Carrier air conditioners.
The company also will reduce its share buyback plan by 50 percent to $1 billion, Hartford, Connecticut-based United Technologies said in a statement today.
United Technologies said it is responding to “contracting markets worldwide.” As a result, sales will be about $55 billion this year, or $2.7 billion less than it forecast in December. Chief Executive Officer Louis Chenevert said an economic recovery that the company previously anticipated would start in the second half of this year now “appears unlikely.”
“The scale of this economic downturn has led to this un- surprising capitulation,” Rob Stallard, a New York-based analyst with Macquarie Capital USA, wrote today in a report to clients. He rates the shares “neutral” and doesn’t own any. “We believe it is a more realistic assessment of the challenges” United Technologies faces.
The company now forecasts per-share profit of $4 to $4.50, including 30 cents to 40 cents for the new restructuring plan, net of anticipated one-time gains of $200 million to $350 million. In January it repeated a per-share profit range for this year of $4.65 to $5.15, compared with $4.90 in 2008.
United Technologies, which had sales of $58.7 billion last year, rose $3.23, or 8.6 percent, to $40.79 at 4:03 p.m. in New York Stock Exchange composite trading. The shares dropped 38 percent in the past year.
‘Fundamentally Reorganize’
“We’ll fundamentally reorganize United Technologies so when markets recover this cost structure will not come back,” Chenevert said today at a JPMorgan Chase & Co. aviation and transportation conference in New York. The company will change its overhead structure “across the board,” he said.
“It’s a reset to reflect the new realities of the economy,” Howard Rubel, an analyst at Jefferies & Co. in New York, who recommends buying the shares, said in an e-mail. “The new game plan should work.”
Including actions for both 2008 and this year, the total workforce will shrink by about 8 percent, or 18,000 workers, the company said. United Technologies had 223,100 employees worldwide as of Dec. 31. Spokesman John Moran said no details were available about which locations would reduce staff.
The company in January said it planned to accelerate restructuring and that its December forecast was under pressure because of deteriorating conditions.
“We view UTX’s actions as prudent, given the sharp contraction in the capital goods marketplace,” said Joel Levington, a director at Hyperion Brookfield Asset Management Inc. in New York. “The company’s decision to curb its share- repurchase activities shows a strong commitment to maintaining a robust balance sheet and good liquidity.”

[louiee]

Mr. Bill,
I don't sell systems, I make the control products for the OEM's. I am trying to develope a forecast for the mix of products built. Will consumers be more willing to move up in SEER for the tax break. To me getting the information from point of sale is much better than down the food chain.

[Mr Bill]

Mr. Bill,
I don't sell systems, I make the control products for the OEM's. I am trying to develope a forecast for the mix of products built. Will consumers be more willing to move up in SEER for the tax break. To me getting the information from point of sale is much better than down the food chain.

Sorry I missed that buddy, but there are a lot of liars out there, that just want to look good, so you might want some documentation from there personal sales "if possible", or you might be left holding the bag. Personally speaking, this is not a good time for predictions "look at the stock market" although I do respect your approach to this, I wish you the best and hope you sale more than your predictions.

[rossb]

Mr. Bill,
Will consumers be more willing to move up in SEER for the tax break.

As a consumer who is looking to purchase a system right now, I can answer yes. Will I spend $3k more to get $1500, in this economy probably not. Would I spend $1500-$2000 more to get $1500....yep!

Problem I'm having is how few contractors in the area are up on the Tax Rebate....frustrating. I've had 5 different contractors look at my home, some large, some small. Even the (2) with sales people were not talking about it. Only one company was somewhat prepared and knowledgeable on the rebate.

Me explaining how it works to contractors has been interesting.

[louiee]

Ya, I hope so as well, for all of you and I. I wish I didn't have to forecast but that is life. With the change to 410A combined with this, makes for some uncertanity.

[louiee]

rossb,
That is our government at work. Why do you think the tax code is as long as it is.

They don't make things clear.

[Mr Bill]

Problem I'm having is how few contractors in the area are up on the Tax Rebate.

Personally in my opinion as a contractor I will say this, if your a contractor selling systems for the new Tax Credit, you had better talk to your CPA or tax Attorney "FIRST". We already have a documented case here in Houston, were someone sold a system that he thought qualified and now found out it don't.
I am working on a "Company Rebate Program" for my customers now, with the advice of my CPA, that I think will be lots less headaches, $1500.00 is $1500.00 right? does it matter if it comes from me or the Government? and Mr. Bill's "EER" ratings will be a little lower, remember it doesn't take a lot of thinking to out think the Government, just some vision.