In yet another attempt to boost the still struggling economy, the government is encouraging consumers to go green. Certain energy-efficient purchases allow taxpayers to receive a rebate to help alleviate the expense of making earth-friendly purchases. While these energy-efficient improvements can be costly, the incentive programs combined with the energy savings you’ll see make exploring energy-efficient options worth your time.
High Cost, High Return
Depending on the product specifications, some of the more expensive qualifying items include HVAC systems, roofs, water heaters, and windows. Installing any of these items may qualify you to receive up to $1,500 in tax credits. Obviously, you’ll only make these types of improvements if it’s absolutely necessary. But, if you’ve been considering installing new windows anyway, this may be just the extra incentive you need.
Upgrade Your Old Appliances
As part of the American Recovery and Reinvestment Act of 2009, the federal government allocated funds to states to provide rebates for homeowners who purchase energy-efficient appliances. Refrigerators are typically the biggest energy hogs of all your home appliances, making them the first candidates to be replaced. Also, consider updating your washer and dryer as well as your other kitchen appliances. Again, these replacements can be expensive, but if you’re ready for an upgrade anyway, the rebates make it more cost-effective for you.
Inexpensive Improvements Add Up
If you have no need to update your windows or appliances, you can still improve your home’s efficiency and receive compensation for your efforts. Simple tasks such as adding caulk to seal up your home or adding insulation to keep drafts out also qualify for a tax credit. These are also inexpensive ways to reduce your home’s energy consumption.
I realize some of these changes can be very expensive. However, if you need to replace these items anyway and plan on staying in your home for several years, the costs can be recouped within a few years, particularly when combined with the tax savings you’ll receive. Some of these improvements can reduce your energy consumption by as much as 25%. Considering the average homeowner spends nearly $2,000 on annual utility bills, the savings can be significant.
If you do plan on making any energy improvements, you need to act quickly. The tax credits are set to expire at the end of the year and will most likely not be extended, while the rebates for appliances will last only as long as funds remain.