CHEAPSKATE PAM here. Be sure you know about all the tax credits you can get for home improvements now through the end of 2010. All part of our economic recovery and energy efficiency programs, potentially good for the environment and good for the pocketbook, too, if played correctly. Money smart because (1) you can save a lot of money directly off your tax bill, offsetting the cost of the improvements by up to 30%, and (2) you can cut your energy bill, especially if you choose improvements whose energy payback is better than the up-front costs. This latter issue can be tricky, though.
I cannot claim to be an expert on which investments to make, if at all, or in which order. But I have some opinions based on my own research and triangulations about what to invest in to save on money and energy, truly. My thoughts:
- Insulate your attic and walls. From all that I have read, having proper, maximum insulation can deliver the #1 payback in money and energy savings in a house, period.
- New windows? The payback is controversial (see this post). Exterior storms may be a better place to put available cash, first. I am going to check this out for my house here in the land of six-month winters.
- New storm doors? I think this might be smart for winter-ites.
- New roof — if you need one, this sounds like a great program to offset some of the expense.
- If you need a new water heater or air conditioning system, this could be a good incentive to make the purchase. Old water heaters can be energy wasters, so you might want to look at the options even if you think your behemoth has a few good years on it; these babies can be insulated too although I don’t know if that cost can earn a tax credit.
- See the EPA website (link below) for the full list of options.
Most of the investments above deliver a 30% tax credit, up to $1500 maximum back. Note, a tax credit is a direct write-off/reduction/cut of actual taxes owed on the bottom, final line of your tax return. (A tax deduction is a reduction to your top-line gross income, the very first number you plug in before you then start figuring out your taxes owed.)
If you are interested in installing solar panels – there is no limit to the tax credit. With this technology, I would just advice, be sure you do the calculations on pay-back time considering various scenarios for utility prices and the life expectancy and maintenance costs of the solar panels. I’m guessing this payback will be very dependent on the climate where you live.
Another important note: A Manufacturer’s Certification Statement also is required for all these purchase.
Three no-cost energy saving tips from my arsenal:
- Use your window treatments. Close off the hot summer sun, then reopen the shades/drapes and windows when the sun goes down to re-cool the house naturally. Some idea in winter: Let the sun in to warm the house in the daytime, but shut those drapes fast when the sun goes down to preserve heat.
- If you’re in a bloody hot climate and are specifying a new roof — choose a light color. Stuff I’ve read online says this can cut energy costs dramatically.
- Run your dishwasher at night, when there is less demand for energy. Not sure if it will cut your bill, but it’s good for the grid.
The EPA’s website on the program seems pretty informative – be sure to check it out fully and save some money on the renovations you need or may already have under way.