Propane-Related Projects to Rise in 2010

At the end of 2009, confidence among residential remodelers about the current and short-term health of their industry was near an all-time low, according to the Remodeling Market Index (RMI), put out annually by the NAHB Economics Group. Now, industry experts predict that spending on home improvements has hit bottom and expect an upturn in activity through 2010.

"Sales of existing homes are on the rise and home-price declines are moderating in most markets across the country," says Kermit Baker, director of the Remodeling Futures Program at the Joint Center for Housing Studies (JCHS) at Harvard University. For Baker, these are signals of a steadying housing economy, as well as of increased availability of financing for remodeling projects.

"There is pent-up recessionary demand, greater contractor availability, and a better macro-economic picture," says Craig Smith, CEO of, an online home improvement lead generator for contractors and remodelers. He's seen a 37 percent increase in homeowner requests in recent months. "Homeowners also show increasing optimism in the stability of their home equity."

If at last the rebound is upon us, replacement projects such as propane-enabled high-efficiency furnaces and water heaters appear poised to increase in demand. As homeowners' newfound regard for the equity of their current homes translates to careful reinvestment, improvements with high rates of return and immediate, measurable benefit will rise to the top of their priorities.

Such organic demand for high-efficiency propane applications is in no doubt fueled by federal tax credits and other local utility and retailer rebates that help offset initial costs and further improve the rate of return. Provisions in the American Recovery and Reinvestment Act (ARRA) of 2009 will continue to allow homeowners to deduct up to $1,500 when they replace energy-hogging appliances with high-efficiency propane appliances. Similar state incentives are allowing some homeowners to double dip into the rebate pot, getting them two or more incentives on the same electric-to-propane appliance replacement. When the federal and state rebates end in 2010, an estimated $6 billion new remodeling work will have taken place, according to Congressional economists.

There are still more economic incentives planned to stimulate remodeling and replacement activity. In March, the Obama administration proposed the HOMESTAR program, parts of which were immediately dubbed "cash for caulkers." The program would inject another $6 billion into the economy to help create jobs and encourage Americans to retrofit their homes for greater energy efficiency. If passed by Congress, the HOMESTAR program would grant homeowners a $3,000 rebate for completing a comprehensive retrofit that results in at least a 20 percent energy savings in their homes. For example, a home heating makeover that begins with an energy audit and results in the installation of a (qualifying) high-efficiency propane water heater would have much of its hard costs paid by the rebate.

For more information on propane-related tax incentives, as well as increasing your knowledge of high-efficiency propane applications, enroll in one of our free training programs.

Propane-Related Projects to Rise in 2010
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