Take Advantage of Energy-Efficient Tax Credits--Now!

By: Karen Appold , Contributing Writer
In: Home Improvement Tips

By Guest Blogger Karen Appold

Older homes are the most likely to need energy efficiency upgrades. Many lack double-pane windows or proper caulking and sealing, which can make them inefficient and drafty. An estimated 65 percent of U.S. homes, about 45 million, are under-insulated, according to the Harvard School of Public Health. In fact, some old homes don’t have any insulation. This is because most states didn’t adopt modern insulation codes until the early 1970s.

As you may know, the federal government has extended and expanded home energy efficiency tax credits through 2010 as part of the broader economic recovery package. It looks like millions of U.S. homeowners plan to pursue them, according to a survey released by www.jmhomeowner.com.

Although early May temperatures hovered around 50 degrees in the Philadelphia area, I was able to get by with minimal heat in my 20-year-old condo. I’m sure that old home dwellers without insulation can’t say the same. The U.S. Department of Energy (DOE) estimates that homeowners can save up to 30 percent on their heating and cooling bills by adding insulation to adequate levels and air sealing their homes. Nice!

The tax credits were created earlier this year by President Obama’s economic recovery package, which sought to encourage consumer spending amid the recession, as well as persuade homeowners to become more energy efficient. The tax credits allow homeowners to claim 30 percent of the cost of qualified energy efficiency products, up to $1,500, including insulation, windows and doors, roofs, HVAC equipment, and water heaters. While that may only add up to a few hundred dollars in savings, it’s better than what you’re poised to get if you made the same improvement in 2011–nothing!

Despite interest among many homeowners, 72 percent of survey respondents said they did not know exactly how to apply for any energy efficiency tax credits or rebates, including those offered by state governments or local utilities.

Sure, the process can seem intimidating, but here are some tips to get you started. To earn an energy efficiency tax credit, save your receipt for a qualified purchase, print a form provided by the product’s manufacturer, and then claim the deduction on your federal income tax return.

For more information about energy efficiency tax credits and rebates, visit the Web site of Alliance to Save Energy, a nonprofit that promotes energy efficiency, at http://ase.org/. Also check out http://www.dsireusa.org, which tracks available energy efficiency and renewable incentives at the state level.

Perhaps you’ll want to use your 2009 tax credit toward the purchase of another green home improvement in 2010!

Karen Appold owns an editorial consulting business, Write Now Services, based in Royersford, Pennsylvania. A Pennsylvania State University graduate with a B.A. in English, her achievements include serving as managing editor of Greater Philadelphia House & Home magazine, an editorial consultant to several clinical laboratory journals and editor of a daily newspaper.