If you haven't already jumped on the home energy-efficiency bandwagon, the good news is that several federal energy tax credits originally slated to end in 2010 were extended through December 31, 2011; but the not-so-good news is that these credits are worth significantly less and are more restrictive than before. All is not lost, however, since several additional credits (outlined below) remain in effect through 2016.
Here's how the soon-to-expire energy tax credits work:
You may claim a credit for 10 percent of the total cost of various home energy-efficiency products for your existing primary residence, including: insulation; heating, ventilation and air conditioning systems; metal and asphalt roofs; energy-efficient windows, doors and skylights; biomass stoves and non-solar water heaters. There are a few restrictions, however:
Energy tax credits will continue to be available for geothermal heat pumps, solar energy systems and wind energy systems installed at new or existing principal or second homes by December 31, 2016. The credit is for 30 percent of cost, with no upper limit.
In addition, a credit continues for fuel cells at 30 percent of cost up to $500 per kW of power capacity (for primary residences only). And tax credits are still available on certain fuel-efficient vehicles. See this site for details. For full details on available tax credits, visit this Energy Star site.
Tax advantages are just one of many reasons to conserve energy. Besides helping to protect the environment and reduce your carbon footprint, you can also save big bucks. According to the Department of Energy, you can reduce your heating and cooling bills about 10 percent per year by simply turning your thermostat back 10°-15° for eight hours, either manually or using a programmable thermostat -- say, when you're asleep or at work. Other cost-saving ideas include:
And finally, if you're a low-income household and can't afford to weatherproof your home, find out if you're eligible for the Department of Energy's Weatherization Assistance Program (WAP). If you're accepted, a professional weatherization crew will conduct a home energy audit where they'll analyze your utility bills, test for infiltration of outside air, inspect your home and equipment for safety and determine the most cost-effective energy conservation measures for your home
Depending on what they find, the agency will then conduct needed repairs and equipment installation, which might include: installing wall, floor and attic insulation; sealing and repairing ducts; reducing air infiltration and pressure imbalances; and tuning, repairing or replacing heating and cooling systems, as needed.
To learn more about WAP, see my previous blog, Home Weatherproofing Aid for Low-Income Families. Also, even if you aren't eligible for WAP, you may qualify for short-term utility bill assistance through the Department of Health and Human Services' Low-Income Home Energy Assistance Program.
Bottom line: Take advantage of financial incentives available to make your home more energy efficient -- just in time for winter's chill.
This article is intended to provide general information and should not be considered legal, tax or financial advice. It's always a good idea to consult a legal, tax or financial advisor for specific information on how certain laws apply to you and about your individual financial situation.
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Follow Jason Alderman on Twitter: www.twitter.com/PracticalMoney