A clear advantage in this tax break

Pity the poor window-film industry. Its products can dramatically reduce heating and cooling bills, keep furniture from fading and stop glass from shattering in an earthquake.

But almost inevitably, consumers think of the stuff as bubbly, tacky and cheap.

“If you see a beautiful window, you assume it’s the glass. You don’t think anything about the film,” said Darrell Smith, president of the International Window Film Assn., based in Martinsville, Va. “But if you see a window that looks bad, you assume it’s got ‘some of that film’ on it.”

Now, though, window film companies think they may finally get an image makeover thanks to a new tax credit -- if they act fast.

The credit was included in the Energy Tax Incentives Act of 2005, said Mark Luscombe, principal tax analyst with CCH Inc., a Riverwoods, Ill.-based publisher of tax information. The act provides reductions in tax owed for people who buy energy-saving water heaters and cooling systems and retrofit their homes for solar energy.

The credits went into effect in 2006. But it wasn’t until a few months ago that the window-film industry realized it hadn’t been passed over. That’s because the act discusses replacing windows but makes no specific mention of credits for window film.

It took the trade group’s lawyers and accountants the better part of a year to realize that many of the industry’s products could fall under the broad category of “other” products that insulate a home. They also needed to get manufacturers to provide the energy ratings necessary to qualify for the credits.

Certainly, Smith said, not being mentioned in the law is another slight. On the bright side, the incentive is a generous one. The tax break for replacing windows is 10% of the cost, up to $200. Replacing a home’s windows with the qualifying energy-saving variety can cost tens of thousands of dollars.

But put window film on existing panes -- a move that can be done at a fraction of the cost -- and you qualify for a credit of up to 10% of the cost to a maximum of $500. The catch: The film has to be applied by the end of this year because the tax break expires in 2008.

“This is a tremendous public relations opportunity for our industry,” Smith said. “It adds credibility to the fact that window films are an extremely valuable energy-saving device.”

The typical home costs about $1,700 to insulate with window film, said Chris Sugai, president of Solar Art in Los Angeles.

Before the tax credits, that investment would pay for itself in about five or six years, he said. That’s because applying window film reduces heating and cooling costs by 10% to 20%. Homes in places such as the San Fernando Valley, where the weather is more extreme, benefit more than those at the beach, he said.

In addition, window film can triple the life of upholstery by reducing fading, and though it won’t stop glass from breaking in an earthquake, it will stop it from shattering, he said.

Still, Sugai acknowledges that window film is a tough sell.

“The biggest problem that we face is that people see a car driving down the street with big bubbly windows and they think, ‘I would never do that to my house,’ ” Sugai said.

The film that goes on homes is nothing like that, he said. It’s far more expensive, professionally installed, guaranteed for life, and -- somewhat tragically for Sugai -- completely invisible. When it’s good film, he said, it’s impossible to show how good it looks. “It’s as thin as a piece of paper, completely transparent and can lay in the sun for 15 years and won’t change in color, fabric or structure,” Sugai said. “I could put the film on two windows in your house and bet you $100 that you’d never be able to figure out which two it was.”

Sugai is thankful for the tax break, and said he and every window-film manufacturer in the country would be spending the next few months pitching this window of opportunity. Still, he’s cynical about how much it might do for the industry.

“Every year, I think that this is going to be the breakout year when everybody figures out how great this product is,” he said. “But I’ve been in this business for 23 years, and I’m still waiting.”

kathy.kristof@latimes.com