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http://www.austinenergy.com/About%20Us/Newsroom/Press%20Releases/2010/solarSchools.htm

Until Dec. 31, 2010, homeowners can take advantage of a national tax credit on a variety of energy-saving products. Here’s a basic explanation of how the tax credit works, with help from the Internal Revenue Service.

There appears to be a cauldron of federal stimulus money going to waste these days because large numbers of Americans are more concerned about saving their houses than improving them.

This isn’t setting too well with the remodeling industry, especially home-center chains such as Home Depot, which has sent out a reminder that, earlier this year, Congress approved the American Recovery and Reinvestment Act.

Meaning that, until Dec. 31, 2010, homeowners can take advantage of a national tax credit of 30 percent of the cost, up to $1,500, on a variety of energy-saving products. Insulation, windows and doors, roofing, heating, ventilating and air conditioning systems, tankless water heaters and alternative energy programs, such as solar panels and wind turbines, are covered.

Here’s a basic explanation of how the tax credit works, with help from the Internal Revenue Service.

What the law means: First, the provision that covers this is the Residential Energy Property Credit (Section 1121 of the act), which increases the energy tax credit for homeowners who make energy-efficient improvements to their existing homes. The law increases the credit rate to 30 percent of the cost of all qualifying improvements and raises the maximum credit limit to $1,500 for improvements placed in service in 2009 and 2010.

Didn’t we have this before? A similar credit was available for 2007. Standards for products that qualify for the credit are higher than the ones allowed in the 2007 law. To be helpful, the IRS is advising manufacturers on how they can certify that their products meet these new standards for the credit. Homeowners may continue to rely on manufacturers’ certifications under the 2007 law, such as EnergyStar labels, to see if products they bought before June 1 are eligible.

Here comes the sun: Then there is the Residential Energy-Efficient Property Credit, or Section 1122, of the Recovery Act. This is a nonrefundable energy tax credit designed to help individual taxpayers pay for qualified residential alternative energy equipment, such as solar hot water heaters, geothermal heat pumps, and wind turbines.

What’s new here: The new law removes some of the maximum amounts previously allowed, and permits a credit equal to 30 percent of the cost of qualified products.

So what should I look for? For insulation to qualify, its primary purpose must be to insulate (example: insulated siding does not qualify).

Windows, doors, and skylights: Starting Oct. 1, you’ll see a red or black label, in combination with EnergyStar designations, on these products. The label identifies high-efficiency products that now qualify as EnergyStar but don’t meet the stricter requirements effective April 1, 2010. Windows, doors, and skylights purchased on or after June 1, 2009, must have U-factor and Solar Heat Gain Coefficient (SHGC) ratings of 0.30 or less. These ratings must be certified by the National Fenestration Rating Council (NFRC). Look for the NFRC label.

Storm windows and doors: There is a tax credit. The best way to find ones that qualify for it is to ask your retailer for the Manufacturer’s Certification Statement for them.

Roofs? “Metal roofs with appropriate pigmented coatings” and “asphalt roofs with appropriate cooling granules” that also meet EnergyStar credits are eligible — just the materials’ cost, not the labor or roof coatings.

Alternative energy: Tax credits are available at 30 percent of the cost, with no upper limit through 2016, for existing homes and new construction, for geothermal heat pumps (they use about 30 percent less energy than a standard heat pump); solar energy systems — both solar hot water heating and photovoltaic power generating; residential small wind turbines with a capacity of not more than 100 kilowatts; residential fuel cell and microturbine systems with at least 30 percent efficiency, and hybrid gasoline-electric, diesel, battery-electric, alternative fuel, and fuel cell vehicles and electric cars.

Ask your tax accountant for details.

 You probably know that this summer, the City of Austin made Energy Audits mandatory in conjunction with home sales.  You may not know that the feedback coming from those inspections is coming in, and homes are consistently rating most poorly in areas of insulation and damaged ductwork.  With much of our local construction style involving dark roofs with AC ducting in uninsulated attics where the summer temps can rise to 125 degrees, it’s no wonder these poor, baked ducts are commonly showing leakage rates of 30-40%.  You can save a lot of money when you aren’t air conditioning the great outdoors! 

There are some fabulous, and relatively untapped, sources of federal tax rebates to reimburse you for having energy retrofit work done, so you can get paid in rebates and save with lower bills.  Earlier this year, Congress approved the American Recovery and Reinvestment Act.  Until Dec. 31, 2010, homeowners can take advantage of a national tax credit of 30% of the cost, up to $1,500, on a variety of energy-saving products. Insulation, windows and doors, roofing, heating, ventilating and air conditioning systems, tankless water heaters and alternative energy programs, such as solar panels and wind turbines.   Check the Green Living Library for a pdf that outlines these rebates and how to use them.  Stanberry’s Green Team has also assembled some notable discounts through local contractors to enhance your savings even further, also available on our Green Living site. 

If you are considering purchasing a more energy efficient home, we can help you save money on that as well.  New Energy Efficient Mortgages allow you to identify a home to buy, have a HERS rating inspection done (Home Energy Rating System), then borrow an additional amount to cover energy upgrades that will be done at closing.  The title company escrows money to pay contractors, and you can count the monthly savings you will experience as part of your income qualification!  So you can afford more, expect lower energy bills, and on top of that, get money back from the Federal Government for the improvements! 

 The process is made simple by using professionals that understand the processes, and that starts with an informed REALTOR, who is at the center fitting the pieces together for you.  Please let us know how we can assist you; we know the inventory, the processes, and can help make the way smooth through the entire process.  You just can’t say ‘mean green’ anymore, because green is makin’ the livin’ easy!

Take a look and listen at their “electrifying” video!

There are also credits available for energy-saving home improvements. The old 10 percent credit has now been boosted to 30 percent for 2009 and 2010 up to a maximum of $1,500 in the two-year period. Home improvements that qualify include skylights, windows, doors, biomass stoves and high-efficiency furnaces and air conditioners. The credit must be for the taxpayer’s principal residence and you must show all the appropriate documentation.

Installation costs are covered in regards to solar panels, wind energy, water heaters and biomass stoves but are not covered with windows, doors, roofs or insulation.

Credits are also available to individuals who purchase energy efficient vehicles. These tax credits are based on the weight of the car and fuel economy compared with base-year models. For hybrid vehicles for personal use, fill out IRS Form 8910 and for business purposes use form 3800. Check with your tax adviser to see if you qualify for any of these credits.    By Barry Armstrong (Money Matters)