Texas Electricity Company Releases Report on the Energy Efficiency Tax Credit
The report, "The Energy Tax Credit: Is it Worth It?" (found at http://www.bounceenergy.com/education) details what the Energy tax credit is, how it works, and many of the home upgrades the credit covers. It also gives a cost break-down of how much of
Online, October 29, 2009 (Newswire.com) - Bounce Energy, a Texas electricity company, has posted an easy to read report on its website to help consumers who are considering whether or not to take advantage of the 2009-2010 Energy Efficiency Federal Income Tax Credit.
The US Government's Energy Star Program reports that the typical American household spends approximately $1,300 per year on home energy bills. The Environmental Protection Agency estimates that homeowners can typically save up to 20% of heating and cooling costs (or up to 10% of total energy costs - or $130) by air sealing their homes through caulking and sealing drafts. Furthermore, a home owner can save up to $300 from their annual heating and cooling costs by sealing leaks and insulating their duct work.
So, for less than $200 and just a few weekend hours of sealing holes and cracks or tape over leaky duct work, a homeowner can potentially save up to $400 from their annual heating and cooling costs.
In fact, any energy efficiency improvements immediately lower energy bills and will pay for themselves over time. This is especially true when considering the major hardware components of a home:
* Drafty windows or doors that fail to close snugly and allow water to penetrate and rot the sills
* Water heaters with sediment-filled or corroded tanks that will leak and fail
* Heating and air conditioning systems (HVAC) built with inefficient heat-exchangers and high-wattage electronics that waste energy and cause heat
* Wood-burning stoves or furnaces (or other "biomass fuel") that burn poorly, heat poorly, and release waste gases
* Roofs that trap heat and increase the cooling load
* Not enough attic or wall insulation to maintain the home's temperature
For the report, they cite an example of a modest starter home: a single-story 3-bedroom 1750 sq. foot home built in 2008 on the Gulf Coast. By installing Energy Star-rated hardware upgrades such as new triple-pane insulating low-E, argon gas wood-framed windows, a whole-house on-demand water heater, and adding 6 inches of attic insulation, a homeowner can recoup 56% from their yearly energy costs. By adding in the energy tax credit, the owner can receive nearly $2,000 on a $4750 investment.
Energy efficient features will also enhance the market value and saleability of a home and --most importantly - improve its comfort and livability.
The 2009 and 2010 Energy Efficiency Tax Credit for home improvements is a tax credit of 30% or $1,500 for energy efficient improvements that consumers make to their existing home. In order to claim the credit, the energy efficient improvements must be qualifying Energy Star-rated products and placed in service from January 1, 2009 through December 31, 2010.
According to the Energy Star website (www.energystar.gov):
Basically you can spend up to $5,000 during this 2 year period on a single or multiple improvements, and get 30% or $1,500 (30% of $5,000 = $1,500) back as a tax credit. If you get the entire $1,500 credit in 2009, then you can't get anything additional in 2010. The $1,500 tax credit does not double for married people filing jointly... unless both spouses owned and lived apart in separate main homes.
The tax credit does not include things like caulking and weather stripping. Rather, the tax credit aids in replacing those major hardware components of a home such as windows, doors, insulation, roofs, HVAC, non-solar water heaters, or biomass (usually wood) stoves. Some installation costs are covered, such as non-solar water heaters and heating, ventilation and air conditioning systems (HVAC).
In addition to the credit for existing homes, there is a credit with no final cost limit for more complex yet far-efficient projects that promote energy independence: geothermal heat pumps, solar water heaters, electricity-producing solar panels (PV), fuel cells, and small wind energy systems. Projects like these will receive a credit of 30% of their total cost and have until 2016 to be placed in service.
The Energy Star website has wealth of information as well as links to other government websites about all the improvements covered in Bounce Energy's report. Remember these are all upgrades that keep saving money each year. Some can be improved on further, one step at a time.
So, is the Energy Tax Credit worth it?
Bounce Energy says, "Yes, the Energy Tax Credit is worth it because an energy efficiency improvement will save energy and money and make your home more comfortable. As you can see there are many, many ways to capitalize on energy efficiency improvements to your home; from the weekend with a caulking gun to a four week wind turbine adventure with a 60 foot crane. You might even become so energy efficient you'll be energy self-sufficient."