Don’t Forget to Look for the Energy Rebates and Credits!
Things have been busy of lately here and we have been away from blogging for a while. But during that time, some cool things have been happening with the ongoing effort to refresh our home and make it more energy efficient.
We actually saved the best for last, so to speak, when we replaced the old, inefficient and leaky furnace with a new 95.5% ultra efficient unit, and bumped up the insulation in our attic to R50. The difference in comfort is obvious with these two projects and so is the difference on our monthly gas bill. In fact, the first month after we did the work, November 2010, we had about a 50% reduction in gas use over the same month of the previous year. And we even had the heat set a bit higher than the year before because our garden level does tend to be chilly in the winter.
Aside from the obvious energy efficiency improvement, the great thing about this project was how much money we saved when we did the work due to rebates from the local utility and a State of Colorado program called ReCharge Colorado, and due to the Federal tax credit in place for 2009 and 2010.
Check this out…our ultra-high efficiency furnace cost about $3700. But, I was able to get an immediate rebate from Xcel Energy, our natural gas provider, of about $100, or maybe it was $120. Then, I filed with the State of Colorado and using ReCharge Colorado, a program to incentivize energy efficiency improvements, I could claim $500. That check came to me in about one month. Whoo-wee, we like that!
But that isn’t all. I am in the process of preparing all my information as I write this in order to claim a hefty tax credit on my Federal return. It is going to work out that this new furnace will get me about $1200 back on my income tax for 2010. So, by my calculations, that $3700 furnace ended up costing me about $1900!
It was a really similar story with the ubur-insulation job. By tapping into the same three programs, I was able to get the price down from $500 to about $50! (Note: I am still waiting for the check from ReCharge Colorado. They claim that the funds haven’t been released yet, but I can expect a $200 check in the next month or two.)
So, if you did any energy efficiency improvements last year, it may not be too late to take advantage of rebates and tax credits. Make sure you collect all of your receipts and documentation and start looking for what was available for you in 2010. The best place I have found to gather this information is a clearinghouse called “DSIRE” (Database of State Incentives for Renewables and Efficiency) at http://dsireusa.org . Just select your state from the interactive map and you’re off and running.
If you plan to do any work in 2011, make sure you do your homework in advance to see what you might qualify for. State and local rebates are constantly changing and to qualify, sometimes you need to apply in advance of the work, or I have even seen a local program that requires a simple energy audit by an approved provider before you apply to participate. If really pays to do your research in advance to make sure you follow all of a particular program’s steps to qualify.
A note on the Federal residential energy tax credit. This program allows people to claim 30% of the costs of energy improvements up to $5000, so basically up to a $1500 tax credit over the two year period of 2009 or 2010. Since I claimed about $200 for some energy efficient doors I installed in 2009, I could claim about $1300 in 2010. To claim this you will need to file IRS form 5695.
It look likes the Federal residential energy tax credit was renewed for 2011, but at significantly lower levels. In general it appears that a person can claim up to $500, but windows are maxed out at $200, furnaces at $150, air conditioners and water heaters at $300. And those who claimed the tax credit in previous years are not eligible in 2011.
If you are thinking about selling your house this year, projects like the ones mentioned above are especially inexpensive right now with these credits and rebates and can add significant value to your home, or help to overcome an objection if your home is currently inefficient. If you live in Northern Colorado, give The Green Team Real Estate a call. We can help you decide what projects makes sense to do before you put your home on the market and we’ll help you sell it for the best price.