Energy Improvement Tax Credits

If you are impacted by the cold wave or saw your air conditioning bill skyrocket last year, now is a good time to think Efficiency.

Recently there has been a lot in the news about the tax credit for first-time homebuyers, but don’t think there is nothing for existing homeowners. Many sources have told consumers not to stop thinking “energy conservation” now that the price of oil is moderating. It’s a great time to make energy efficient  improvements in their homes.

TAX Credits For New Heating and Cooling Systems From: Houselogic.com

Many in the remodeling industry thought the meager 10% credit was not enough reason to undertake major renovations and they were right. There was no discernible increase in improvement activity tied to the tax credit.

CREDIT vs DEDUCTION As you may know, a tax credit lowers your total tax due dollar for dollar. If you owe the IRS $500  and have a $200 credit, that $500 gets lowered to $300. A tax deduction, however means you can reduce the amount of taxable income that you owe taxes on. The real benefit is seen after your apply your tax bracket. Most times when you figure it out, a Credit is better than a Deduction.

ENTER 2010: In order to both increase economic activity (remodeling) and expand energy efficiency, the new stimulus package raises the tax credit to 30% of the cost. It also tripled the lifetime maximum to $1,500. It is retroactive from Jan 1, of last year and expires at the end of 2010.
 
For specific information on new Windows and Doors click HERE

Complete Resources here on Energy.gov

The new provisions also apply to newly added systems such as solar-energy panels, water heaters and geothermal heat pumps.

A lot of what is included in the above actions are considered “Energy Star” approved. You can get a better picture of what is and is not covered at

http://www.energystar.gov/index.cfm?c=products.pr_tax_credits

Tags: energy savings, energystar, tax credits

Ways to Cut Energy Bills

Staying warm doesn’t have to cost a fortune. Here are some ideas from the U.S. Department of Energy for conserving heat and saving money.

The U.S. Department of Energy offers these simple tips and relatively inexpensive home improvements that will help ensure cold gusts stay out and your furnace doesn’t have to work harder than it should.

The goal is to conserve energy and keep more of your hard-earned dollars in your own pocket.

1. Plug air leaks with caulking, sealing, or weather stripping. Save 10 percent ($190 per year) or more on energy bills. Focus on windows, doors, outlets or switch plates on exterior walls.

2. Properly maintain the heating system. Heating accounts for half the average family’s energy bill (approximately $950 per year). Make sure the furnace or heat pump receives professional maintenance each year. The small cost (about $75-100 for most service calls) will pay back in better performance all year long.

3. Install a programmable thermostat. Programming the thermostat from 72ºF to 65ºF for eight hours a day while no one is home, or everyone is tucked in bed, will cut the heating bill up to 10 percent ($90 per year), paying for a basic unit in less than a year.

4. Seal and insulate heating ducts. A system can lose up to 60 percent of its warmed air before it reaches the register (wasting $570 in warmed air per year) if ducts are not properly insulated in unheated areas such as attics and crawlspaces.

5. Insulate, insulate, insulate. Adequate insulation in the attic, ceilings, exterior and basement walls, floors, and crawlspaces can save up to 30 percent on home energy bills ($630 per year). Focus on the attic. (Heat rises.) Most homes should have between R-30 and R-49 insulation in the attic. Learn more at www.eere.energy.gov/consumer.

6. Close fireplace dampers when not in use. When in use, reduce heat loss by opening dampers in the bottom of the firebox (if provided) or open the nearest window about an inch, close doors to the room, and lower thermostat setting to 50-55ºF.

7. Let the sun shine in. Open curtains on south facing windows during the day to allow sunlight to naturally heat the home, and close them at night to reduce the chill from cold windows.

8. Stay out of hot water. Water heating accounts for 15 percent of household energy use. Reduce water heating costs by lowering the water heater’s thermostat setting. Each 10ºF reduction can save between 3-5 percent in energy costs. Also insulate the hot water heater and hot water pipes.

9. Install storm windows over single-pane windows or replace them with Energy Star qualified windows. Storm windows reduce heat loss by 25 to 50 percent, and storm windows with low-e coating that reflect heat back into the room during the winter months save even more energy. Look for the Energy Star label to maximize savings. Energy Star qualified windows reduce heating and cooling bills by an average of $345, but could be higher in cold and hot climates, compared with uncoated, single-pane windows. Can’t afford new windows just now? Tape clear plastic sheeting to the inside of window frames if drafts, water condensation, or frost are present.

10. Net big savings with a little label. When replacing appliances, light bulbs, electronics, or heating and cooling systems, cut energy bills by up to 30 percent ($600 per year) with Energy Star labeled products. Use compact fluorescent light bulbs (CFLs) in place of comparable incandescent bulbs. Find retailers at http://www.energystar.gov/.

These and other improvements that impact the energy efficiency of a home can save home owners money in the short term and serve as a selling point to potential buyers later. Be sure to save receipts, documentation, and manufacturer’s information. Try the Department of Energy’s online energy audit tool at http://hes.lbl.gov. In the long run, a whole-house energy audit is a fool proof way to make a plan to address wasted energy and make a home operate efficiently for years to come.

Tags: DOE, efficiency, energy, energy audit, energy bills, energy efficiency, energy savings