Tax Credit Chronicles Continued
We just have no idea where we stand with anybody in Albany.
Everybody says that they are working on something. In the meantime we had to give 2 week notice to our first 2 employees. We simply did not have any new residential jobs sold in the last 4 weeks, so starting Jan 1st pretty much the whole geothermal industry is falling off a cliff, since we could not get the federal tax credits extended.
People who want to invest into renewable technologies simply follow the incentives right now.
We started 2016 with a backlog of work worth about $350,000. We employed 4 technicians and a manager. Two of the technicians were young people we were training from scratch, early 20’s, making $13/hr. The other two senior technicians were making $17.50/hr. We typically would do about 20 residential and 1-2 commercial jobs per year. Payroll was about $240,000. Subcontracted excavation and well drilling was about $280,000. Purchase of made in USA heat pumps was about $300,000.
We are now starting off 2017 with a backlog of $4,000 worth of work. We have one manager and one part-time technician. We let the other folks go and they are currently collecting unemployment. I am anticipating that sales will drop to $200,000 in 2017. There will be only commercial. That might even be optimistic. Payroll will be about $70,000. We are certainly considering dropping out of this business. This would leave 100+ customers with no technical support or warranty administration. With very little installation work, you cannot keep the talent around that you need to do the service. We are bidding a couple commercial jobs right now. If we are successful, we will plug along. Otherwise, we have to put our corporate resources where the money is, and it is not going to be Geothermal.
Contractor, Southern Tier