Money saving energy tax credits due to expire by year end

Image via WikipediaWe are only a few months away from the end of the year and money saving tax credits are soon expiring. These tax credits for energy-saving new windows, air conditioning, doors, water heaters, and insulation will soon end. Local contractors are seeing a last minute rush to get the upgrades done.

The reason your power bill will shrink. A new air conditioner is typically 30% more efficient than a 10-year-old model, and insulation can reduce air leakage by 20% to 30%. Adding insulation, replacing duct work, getting a central air cooling system and replacing water heaters — are the most cost-effective home improvements.

New windows can save homeowners up to $500 on energy costs a year while a new water heater will pay itself off in five years — not counting the tax breaks—according to calculations by the U.S. Environmental Protection Agency, Energy Star and home-improvement retailer Home Depot.

Insulating your home can save you about $220 a year and you could recoup your costs after 2.5 years.

Some of the energy-saving home improvements that are part of the tax-credit program are easy to do yourself, while other projects require professional installation.

Make sure your purchases qualify for the tax breaks, as not all Energy Star appliances are covered under the tax-credit program. Energy Star is a joint program of the U.S. Environmental Protection Agency and the Department of Energy that promotes energy efficiency.

And keep receipts for tax purposes. Keep the receipts for several years in case you get audited.

There are many Federal tax credits available for homeowners and business. Here is only a partial list.

Insulation

Credit: 10 percent of the cost, not including labor, up to $500

Requirements: Bulk insulation products such as batts, rolls and blow-in fibers may qualify.

Savings: Homeowners can save up to 10 percent on their total annual energy bill by sealing and insulating a home's outer walls, ceiling, windows, doors and floors.

Reflective metal and asphalt roofs

Credit: 10 percent of the cost, not including labor, up to $500

Requirements: Metal roofs with appropriate pigmented coatings and asphalt roofs with appropriate cooling granules and they also must meet ENERGY STAR requirements.

Savings: Homeowners could save about $200 with a highly reflective roof.

Windows, skylights and doors

Credit: 10 percent of the cost, not including labor, up to $500. Windows are capped at $200.

Requirements: Must be ENERGY STAR qualified.

Savings: Windows, for instance, can reduce energy bills by 7 percent to 24 percent.

Gas, oil, propane and electric heat pump water heaters

Credit: $300

Requirements: Gas, oil and propane water heaters must have a thermal efficiency of at least 90 percent or have an energy factor of at least 0.82. Electric heat pump water waters must have an energy factor of at least 2.

Savings: It could take an estimated five years or more to recoup costs for the upgrade, according to JEA, a municipal utility in Jacksonville.

HVAC systems

Credit: $300 for central air conditioning.

Requirements: A Seasonal Energy Efficiency Ratio of at least 16 for split systems and at least 14 for package systems or an Energy Efficiency Ratio of at least 13 for split systems and at least 12 for package systems.

Savings: One way to calculate savings is to use the AC rebate and calculator link at FPL.com/programs.

Credit: $50 for efficient fans or blower motors.

Requirements: Must use 2 percent or less of the furnace's total energy.

Credit: $150 for natural gas or propane furnace or a gas, propane, or oil hot water boiler

Requirements: An Annual Fuel Utilization Efficiency of at least 95.

Credit: $500 for air source heat pumps

Requirements: The energy efficiency rating varies depending on whether it's a split or package system.

Savings: An estimated $30 a year can be saved.

Other rebates and credits

There are plenty of other options for homeowners who want to cash in on tax credits and rebates and save money on their electricity bills. They include:

Federal loans of up to $25,000 for single-family homeowners who want to make energy-efficient improvements;

Federal tax credits covering 30 percent of the cost of geothermal heat pumps, and solar and wind energy systems;

Money for insulation and other energy-saving upgrades through low-income weatherization programs that is available by contacting community action agencies within county governments; and

Rebates for energy-efficiency improvements available through some cities and counties.
Check out the Database of State Incentives for Renewables & Efficiency for your state specific rebates and credits.http://www.dsireusa.org/

 Also the U.S. Department of Energy for a complete list of federal tax credits and incentives.    http://www.energysavers.gov/financial/70010.html