Friday, January 31, 2020

Correspondence on HPBA policy on calculating efficiency for the IRS tax credit

After the $300 tax credit was extended to Dec. 31, 2020, AGH began seeing a number of manufacturers issues certificates statements claiming stoves from as low as 59% efficient were eligible for the tax credit. We were not as concerned with any claims of stoves between 70 - 75% efficiency as that could be explained by using lower heating value (LHV).  Our concern was with the many stoves between 59 and 69%.

As is our practice, we first contact companies to clarify what may be an error or a misunderstanding and we were told by one major manufacturer that HPBA had advised manufacturers that they could use a single efficiency number from a single burn rate, rather than using the average efficiency from all four burn rates. We then wrote to HPBA to confirm this.

HPBA published a letter they sent to us on their blog, claiming we posted incorrect information on our blog about the tax credit. They were correct that one sentence was misleading and we immediately changed it (our readers often suggest changes and we often make them).

We took this opportunity to post our communication to HPBA, which gives a flavor of scores of similar back and forths between AGH and HPBA over scores of issues where we have differences.  AGH is also an HPBA member and we have always worked to improve the functioning of the association.

Excerpt of a Jan. 17, 2020 email sent by John Ackerly to Jack Goldman, John Crouch and Rachel Feinstein of the HPBA

I would strongly request that you urge manufacturers to only use their average efficiency from certification testing to determine eligibility for the federal tax credit. While I don't believe there is any legal basis for using LHV, I realize that is a non-starter so I would at least urge you to tell manufacturers not to cherry pick from the efficiency of a single burn rate. Currently, there are a number of manufacturers claiming stoves that are below 70% efficient and at least one that is listed by the EPA at 66% efficient. Some manufacturer defend using an efficiency from a low burn rate saying that is where most customers use their stove (which also happens to be the most likely burn rate to smolder). And at least one says that HPBA provided guidance saying that it was acceptable to choose which burn rate had the highest efficiency. Enabling companies to mislead consumers into thinking they are buying a 75% efficient stove is bad policy for a trade group. Please help create an atmosphere where consumers are steered towards stoves that are at least 70% efficient, HHV.

Excerpt of an email from John Ackerly to Jack Goldman on Jan. 28, 2020

Thanks again for your reply last Friday…. As for the efficiency calculation, I will reach out to Rachel for a quote. As I said, I'm wondering if HPBA has any position - and it seems not - on whether manufacturers should use any common way of determining efficiency. For example, should they only use the weighted average efficiency, or should they pick which ever burn rate is best? The "law" doesn't stipulate some of the finer points for other appliances and that is where trade associations can help build or undermine consensus within their industry. I have been told by some manufacturers that they were advised by HPBA that using an efficiency of a single burn rate was acceptable. I want to get HPBA on record about that, and for the reputation of our industry, I very much hope HPBA can distance itself from such shenanigans that mislead consumers and waste taxpayer dollars.

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