It is critical today to reduce household expenditures wherever we can. It does not matter a bit which side of the global climate change debate you are on.
There’s no denying that it just makes good sense to save money on monthly bills when the Obama administration is making it harder for energy companies to do business.
But the US government is willing to encourage citizens to move in an energy conserving direction. The carrot on the end of the stick is energy tax credits.
Reaping Federal Energy Tax Credits
Tax credits are based on Energy Star qualified products, however it’s important to note that not all Energy Star labeled appliances and building materials will always qualify in every case.
That is why it is important to check for annually updated guidelines prior to buying an appliance or renovating your home with a greener building product.
But keep in mind that even if you don’t qualify for the credit, you will still save on bills for years to come and that in itself justifies the upgrade in many cases.
For example, the credit is defined as 30% of the cost of the Energy Star appliance or product up to a value of $1500. But there are exceptions. Up until the end of 2016 there is no upper limit on geothermal heat pumps, wind turbines, and solar energy systems.
In almost all cases, this credit only applies to the purchase price, not your installation labor expenditure.
This is precisely what makes DIY projects more attractive. As a caveat, only existing primary residences can make a claim. New home construction can build green to go for a LEED cirtification. So what’s included?
Heating and Air Conditioning Systems (HVAC)
Pellet stoves are currently the biggest stand-alone heating units according to a radio report I heard (sorry, I was driving so I can’t accurately source the story).
Biomass-fueled heaters are also getting a lot of press. Biomass fuel is composed of items such as wood waste and corn plant fibers. Why is this so desirable? It limits loading up the landfill.
For this kind of unit to qualify, its thermal efficiency rating (TER) has to be rated at a minimum of 74% and the installation cost for these stoves do qualify (see, there is no consistency with government mandates).
Central Air Conditioners and Heat Pumps
Central A/C units will not have the same qualifying numbers with regards to split systems and package systems. If you opt for a split system, it has to be rated at SEER >= 1, and EER >= 13.
On the other hand, a package system is required to be rated at SEER >= 14 and EER >= 12. Keep in mind that these numbers are subject to change; check them with EnergyStar.gov before you make a purchase.
Next, air source heat pumps are a great residential investment since they can provide 4 times the amount of energy that they consume. These units use different ratings due to the technology — for split units, HSPF >= 8.5, SEER >= 15, and EER >= 12.5.
If you go with a package unit, look for HSPF >= 8, SEER >= 14, and EER >= 12. For both air conditioners and heat pumps, installation costs are also applicable.
This product category is one of your best opportunities for a money saving upgrade, since the purchase price is low compared to the cumulative savings over the years.
Although neither insulation or radiant barrier foil (or paint) installation labor expenditures will qualify for an energy tax credit, both of them are simple DIY projects that require few tools or experience.
Whenever you install either of these products, your utility bills savings will begin to drop, be it winter or the summer. It is worth pointing out that these products, when installed in the attic, are best installed during the colder months, due to the heat during the other times of the year.
It is important to note that not all brands radiant barrier foils will qualify although they are all classed as an insulating product. One brand that does qualify is Energy Q®, the same foil that NASA uses.
Exterior Doors and Storm Windows
Again, installation costs are not qualified for these products, but like insulation, they are potential DIY projects. It’s a simple to install a prehung door. Windows are a bit trickier, but are well within the ability of a handy homeowner.
Consult the government Energy Star sites for specific details on eligibility on qualifying for the energy tax credit in all categories; there exist far too many variables to list here and they change often.
which comes highly recommended.
