Energy Boost

Call it getting green for going green. Uncle Sam is giving you a nice chunk of change for making some environmentally friendly changes in your home. Under the new energy efficiency tax credit program, homeowners can receive 30 percent of the cost of a qualified home improvement/product up to a maximum of $1,500.

The maximum tax credit has been raised from $500 to $1,500 for the two-year period of 2009 and 2010. All home improvements must meet all performance specifications for their category.
 
Some conditions and caveats to consider:
•  Proof of purchase: Must provide a sales receipt (Federal law requires itemized receipts) for product(s) only.
•  Include product labels or manufacturer's certification statement.
•  Must be used for remodeling or replacement (new construction does not qualify for the new tax credit).
•  Energy-efficient products must be purchased and placed in service during 2009 or 2010 (more specifically, between   February 17, 2009, and December 31, 2010).
•  The tax credit of $1,500 is a combined total for 2009 and 2010 energy-efficiency improvements.
•  Installation and other labor costs do not qualify for the tax credit.

Clay Lyon, owner of Lyon Construction + Design and a former energy conservation program coordinator and reviewer, utilizes an energy-efficient approach to his work. “If we are planning an addition or remodel, we will incorporate components that comply with the requirements,” he says. This includes environmentally friendly windows, doors, insulation and mechanical systems. 

Here is a glance at eligible home improvements/products:

Windows & Doors
Your windows and doors comprise one category where you can start making your home more energy efficient. As of June 1, 2009, eligible windows and doors must have both of the following:

* a U-Factor equal to or less than 0.30
* a Solar Heat Gain Coefficient (SHGC) equal to or less than 0.30

One example of a manufacturer meeting the new guidelines is Andersen Windows, which offers an entire line of eligible windows and doors with its EcoExcel Energy Performance Package.

HVAC
Efficiency levels have been modified to reflect the highest tier of the CEE High-Efficiency Specification for Residential HVAC Systems for equipment placed in service.

According to Bill Jones, operations manager at Midwest Heating Cooling and Plumbing, furnaces that are 95-percent efficient or higher qualify for the tax credit. “Air conditioners that are 16 SEER or higher and heat pumps that are 15 SEER or higher are also eligible,” he adds. 

Bill says that an upgrade can cost anywhere between $2,500-$10,000 for HVAC products, depending on how big the system is. So far, he says the tax credit has appealed to many homeowners. “We've literally sold hundreds of systems,” he notes.

While there is a cap of $1,500 on most energy-efficient products, Bill notes there is no limit on geothermal heat pumps. “If you spend $20,000, you will get $6,000 in tax credit.” Additionally, solar water heaters and solar panels are not subject to the $1,500 maximum.

Insulation
Energy-efficient insulation in your home is also eligible for tax credits. The Hayes Company offers an entire line of insulating products for walls, attics and basements. Fiberglass, blown cellulose and spray foam with renewable content are just a few of the products offered that are eligible under the program's guidelines.

Tim Hayes, retail sales manager, says the average cost for an installation job is $1,500, of which approximately 60 percent is on material (labor is not eligible under the tax credits). In this case, a homeowner can expect to receive $200-300 in tax credits. “It makes the payback look better. For energy-saving options, that takes a year off payback,” he says.

Roofing
Radiant barrier decking is another tax credit-eligible improvement that can reduce cooling costs in addition to improving duct and insulation performance at home. Designed to reduce attic temperatures, a radiant barrier is a type of reflective installation that reduces radiant heat to ducts and insulation located below it by deflecting radiated heat from the roof.

“It's been around for a while but just hasn't been readily used,” says Jerry Fleenor, general manager of Bordner Installation, which carries radiant barrier decking. With this roofing option, living areas and air-conditioning ductwork stay cooler, minimizing the energy needed to maintain comfortable temperatures (and lowering your energy bill!).

With the new energy tax credit, there's more incentive than ever to upgrade to a more energy-efficient home. As Clay says, it's about “getting people to take the next step and be slightly motivated [because] in the end, we all pay for the cost of using that energy.”