Home Efficiency Tax Credits, Rebates & Incentives
Posted on Nov 27, 2007 - 08:20 AM
By: Adam Beazley
Never before has it been such an opportune time to renovate or modify your home to be more energy efficient. There is a plethora of grants, Federal tax credits, State rebates and buy off programs, energy-efficient mortgages and even Utility sponsored rebate programs. If you plan everything right and use all of the available resources, you can get a home energy renovation for a fraction of the cost.
Below you will find a listing and short description of all of the different rebates and benefits offered in the United States:
Federal Tax Credits
As of 2008, home owners can now receive federal tax credits for making their homes more energy efficient. You can receive 10% of total expenditures in tax credits, with a maximum payout of $500. There are a variety of different eligible items like exterior doors and metal roofs, However the IRS has put specific amounts particular products such as energy efficient windows, tankless hot water heaters and central air conditioners. One stipulation however is that all of these products must meet the criteria established by the 2000 International Energy Conservation Code.
Here are a few specific tax benefits for the home:
- $50 for purchasing an advanced main air circulating fan;
- $150 for installing a highly efficient furnace or boiler;
- $200 for installing energy efficient windows;
- $300 for purchasing a highly efficient central air conditioner, heat pump or water heater;
One of the best and most substantial addition to this tax law is the inclusion of solar panel systems, solar water heating equipment, and fuel cell power plants. The law gives home owners a 30 percent tax credit, for the purchase of any of these systems.
For more in depth and technical information about the specifics of this tax credit, please download the following PDF file from the IRS: http://www.irs.gov/pub/irs-drop/n-06-26.pdf
State & Utility Rebate Programs
State and Utility rebate programs are very similar to the federal tax credit program, however the rebates are not credits, they are in fact cash sums that you receive from the state or Utility after you have met all of the requirements. Unfortunately we can not list any specifics, as each state and utility has different rebate programs and incentives.
In general, state rebate programs work by offering the home owner a percentage of the calculated energy savings over a 20 year period, with a maximum amount of x dollars. Here in Louisiana, we receive a 20% rebate of the calculated energy savings over a 20 year period with a maximum payout of $2,000.
Most state and Utility rebate programs do require that you have a certified professional energy auditor come out and perform two audits, one before and one after to calculate the projected savings of the changes.
Find out what the local, state and utility incentives are in your area!
Energy Efficient Mortgages (EEM)
Energy-efficient mortgages are a great way to fund a complete energy renovation without any out of pocket expenses. EEM’s are available for new home purchases or to refinance an existing home. EEM’s can add an additional 15% of a home’s appraised value to the principal of a new loan or a refinance, often at no additional cost and sometimes at a better rate.
EEM’s allow home owners to refinance their homes and incorporate the cost of energy-efficient improvements into the new mortgage. This requires no down payment and the home owner does not have to qualify for the additional amount. This is primarily due to the fact that EEM’s recognize that a reduction in energy expenses will allow the homeowner to pay a higher mortgage.
Energy efficient mortgages also benefit new home buyers by increasing their buying power by up to 15% of the value of the home. These EEM’s require that the new homeowner actually prove that the energy-efficient renovations did take place. This is usually done by having a professional energy rater come out to your home before and after the renovations to ensure that substantial energy consumption decrease has occurred. A rating typically involves an inspection by a professional energy rater who is certified under a nationally or state accredited home energy rating system.
The Residential Energy Services Network provides a database of their Certified Home Energy Raters by state.
| Permalink |
|
Show/Hide Comments (5)
By SEO Experts on 06/12/2009
There is a plethora of grants, Federal tax credits, State rebates and buy off programs, energy-efficient mortgages and even Utility sponsored rebate programs. If you plan everything right and use all of the available resources, you can get a home energy renovation for a fraction of the cost.
By Tips For Conserving Energy on 12/06/2009
I took advantage of the $300 credit for the water heater last year. I was able to purchase a tankless system that works great for just $250.
By Online Tax Refunds on 12/18/2009
This year, I purchased my first home, but I co-own the home with another individual to whom I am not married.<ahref=“http://www.taxsmarter.com/”>Online Tax Refunds</a>I know that you can take up to a $1500 tax credit for doing energy efficiency improvements. If we are both paying for qualified improvements, can we each claim what we spent individually?
By seopositive3 on 12/25/2009
I feel delighted to read such a good post, I would like to thank the Author for this marvelous efforts.this post is good in regards of both knowledge as well as information. Thanks for the post.
By Jumping Castle on 03/02/2010
This is just another reason why I like your website. I like your style of writing you tell your stories without out sending us to 5 other sites to complete the story.
