Don't Miss Out On Energy Tax Credits
From now through the end of next year, homeowners have a unique opportunity to add to the value of their property and save money doing it.
The American Recovery and Reinvestment Act of 2009 provides tax credits for qualifying energy-saving home improvements. For the most common upgrades, December 31, 2010, is the deadline for taxpayers to recoup 30 percent of their cost – up to a total of $1,500.
Finding out which home improvements qualify for a tax credit
- Visit the ENERGY STAR Web site. This resource from the Environmental Protection Agency will help you determine which improvements qualify for the tax credit. You'll also find information about whether installation costs for a particular project can be factored in. Generally the credit applies only to the cost of materials.
- Get a home energy audit. If you don't already have a qualifying project on your must-do list, get a home energy audit to see where your money would be best spent. Here are a couple of options:
- A field audit from a contractor who is certified by ENERGY STAR or the Building Performance Institute may cost $250 to $600, depending on your location, but it can be money well spent.
- Your local utility company may offer a more limited energy audit for free.
How much you can save
Beyond the initial tax credit, each of these projects can generate a stream of energy savings that continues year after year. How much you save depends on a number of factors.
"Every house is different. The age of the house is different and the lifestyle of the people in the house is different, so it really depends on your particular situation," says Sal Alfano, editorial director of Remodeling magazine.
Estimate payback potential of home improvement projects
- ENERGY STAR Product Purchase Site: Select a category and then click the savings calculator to get an estimate of what certain projects pay back.
Big-ticket improvements
If you're looking to go green on a grander scale, renewable-energy projects can net you even more savings because the tax credits are cumulative and they don't come with a $1,500 cap. They're available through 2016.
“Hypothetically, you could put solar power on your roof, install a wind generator or put a fuel cell in your basement and get back 30 percent on each project," says Alfano.
