SAVE MONEY: SAVE ENERGY: USE TAX CREDITS
Posted by Margot on December 20, 2011 | No Comments
Tax credits for energy efficiency and for installing new green energy technology are making the right kind of energy usage a lot easier for home owners. Modern state of the art technology uses clean renewable resources, like sun, wind and hydrogen fuel cells, rather than polluting sources like coal and oil, but they usually cost more than conventional and we leave them on the shelves. Now, adding to the pleasure of reducing pollution is the bonus of tax cuts up to 30%, offered by the US government to offset the costs of going green.
With tax cuts reducing the initial outlay for improved technology, the pay back time is much shorter and there is every reason to become proactive in changing the way we use energy in our homes.
Tax cuts are offered for a range of proactive changes:
The changes involve reducing the amount of energy we consume for space heating or cooling, changing the way we heat water and cook food, making better use of the natural environment and producing electricity on our home turf.
1. Energy Efficient Space Heaters is the first and simplest step to take. It entails stopping air leaks from doors and windows, preventing heat loss and making best possible use of natural heat and coolth. 
2. Outdated HVAC systems chew electricity, so replacing these is a major energy saver.
3. Non-solar Energy Efficient water heating systems are easy to install.
4. Generating heat or electricity using alternative sources can take the form of
• Solar Water heating
• Heat pumps
• Photo voltaic systems
• Wind turbines
• Hydrogen fuel Cells
Tax credits apply to the following technologies and installations:
1. REPLACING DOORS WINDOWS AND SKYLIGHTS.
You can add or replace any number of windows, doors or skylights to your existing principal residence, provided they have an Energy Star efficiency rating.
Tax credit is 10% of the cost of the windows, up to $200 per window, and 10% of the cost of the replacement for doors and skylights, up to $500 per item, excluding installation costs.
2. INSULATION.
With insulation you loose less heat, therefore use less heat, and you require less cooling. Alone is can affect your bill by 30%. There’s a wide range of insulating materials varying in efficiency. Those eligible for tax credits require a Manufacturer’s Certification Statement. They include, rolls, batts, rigid boards, blow-in fibers, expanding spray, pour-in-place and air sealants, including weather stripping, spray foam, caulk and house wrap
Tax credit is 10% of the cost of the new insulation, up to $500, excluding labor or installation costs.
3. CHANGES TO HVAC OR OTHER HEATING AND COOLING UPGRADES
The bulk of your utility bill goes toward heating and cooling (approx 40%) therefore replacing or upgrading these systems will have a major impact on your home running costs.
• Energy Efficient House Fans & advanced main air circulating fan moves air through your furnace and duct system more efficiently.
Tax credit is $50.
• Air source heat pump moves air between the outside and inside of your home, from a cool space to warm, heating it in winter and cooling it in the summer. It’s more efficient than a regular HVAC system and costs far less.
Tax credit is $300, with specific energy efficiency ratings.
• Geothermal heat pumps use the ground for heating and cooling and are one of the most efficient mechanisms available.
Tax credit 30% of cost in any home except rentals.
• Central air conditioning systems with a tax efficient certification.
Tax credit $300.
• Hot water boiler propelled by gas, propane or oil, with a thermal efficiency of at least 90%.
Tax credit of $300 (includes installation costs).
• Biomass stoves, otherwise known as wood stoves burn biomass in the form of waste plant fibers and agricultural waste, wood and wood waste and residues (including wood pellets) and grasses. They are more efficient than old wood burning stoves and do not produce the toxic gases of the old ones.
Tax credit $300 on the cost of a new stove, provided it has a thermal efficiency rating of 75%.
4. SOLAR WATER HEATERS.
Water heating accounts for between 14% and 25% of the energy consumed in your home, hence installing a solar water heater that can be backed up with conventional power when there is insufficient sunlight will have a major impact on your bill. They work by siphoning water through a system of tubes mounted on the roof of your house and typically have a collecting and a storage component.
Tax credit is 30% of the solar system, which must be Energy Star, SRCC, or comparably rated by the relevant state. Installation costs and labor are included.
5. PHOTO VOLTAIC PANELS are a way of installing your own mini power station. The panels capture light energy from the sun and convert it into electricity, which is stored in a battery and then converted into the alternating current used for household appliances and lighting.
The initial outlay is expensive but with 30% tax credit, including installation costs, you have the luxury of being independent of energy utilities. Photovoltaic systems must provide electricity for existing or new, principal or secondary residence, and must meet applicable fire and electrical code requirement.
Mini transportable PV panel systems that provide one or two LED lights and power for a mobile phone, TV or lap top are fabulous for campers or hikers. No danger of candles; no smell of kerosene; only sunlight captured by day and used at night. These are stand alone items that do not earn tax credits.
6. WIND TURBINES
The old wind mill, picturesque symbol of farms and fairy tales, has been upgraded to the modern wind turbine, which offers an ideal way to generate your own electricity and reduce your bills. The turbine collects kinetic energy from the wind and converts it to electricity that is compatible with a home’s electrical system.
The tax credit is 30% of the cost of the system (including parts, labor and installation costs), provided the nameplate capacity is not more than 100 kilowatts. It applies to new or existing, primary or secondary residence.
7. RESIDENTIAL HYDROGEN FUEL CELLS and Micro turbine Systems convert chemical energy into electricity. They use hydrogen from natural gas converting it into electricity and producing water as a by product. Fuel cells systems can be expensive to install depending on the application and they do require refilling with natural gas.
The tax credit for installing it in your primary residence is 30% of the cost, up to $500 per 0.5 kilowatt of power generating capacity. It applies to new and existing homes System must have efficiency of at least 30% and a capacity of at least 0.5 kW.
By integrating a range of solutions & energy conservation kits one can have a home that costs the barest minimum to run, since once installed, the items require mostly natural energy sources. A hybrid energy system involves a combination of technologies, if need be backed up by the utility. A SMART metering system could be controlled by a computer to maximize efficiency and select the appropriate technology at any one time.
The future of energy is now. It’s clean, it’s exciting and it’s getting a whole lot cheaper with government support.