Tax Credits Extend Home Energy Conservation Savings
The average U.S. household spends over $2,000/year on energy. Whether you are considering making major energy efficient upgrades to your home or simply plan to buy a new energy efficient appliance, there are a variety of opportunities to lower the cost of your project. By taking advantage of incentives, rebates, and other energy efficiency programs, you can lower your energy costs, improve the comfort of your home, increase the value of your home, and do your part to help the environment.
A great way to save money as you improve your home is to take advantage of energy efficiency tax credits, rebates, and programs offering savings opportunities. The following link provides useful information about ways to Save Money through Tax Incentives, Rebates, and Programs. These resources include federal, state, local, and utility company programs and offers.
Deciding what energy efficient projects make the most sense (and cents!) for you:
Identifying potential energy efficiency savings takes a little detective work. Because every home is different, the energy efficiency needs for your home are unique. Therefore, your first step is to identify the home projects that are most needed for your home. To do this, you must do a home assessment. You can choose to hire a professional home auditor or you can do the assessment with the help of online resources.
Home Energy Self Assessment – Energy efficiency is an investment that can help you gain a return on your energy bill and on the value of your home. Save money by conducting a do-it-yourself home energy assessment. With a simple but careful inspection, you can identify areas in your home where you are losing energy.
Once you have identified the projects that are most needed to make your home more energy efficient, you must prioritize these projects.
Considerations in setting priorities for your energy efficiency projects:
“Boom for the buck” – Answering the questions below will give you an idea of the TOTAL cost and potential savings of a project.
- How much will the initial investment cost?
- DIY or Hire a professional?
- What rebates, offers, incentives, and savings programs can help offset the cost of this retrofit?
- How much money will this likely save me in annual energy usage?
- How long will it take to “break even” on this project? (Savings in energy will “pay you back” for an energy efficient measure so your “initial investment” will, at some point, match the amount invested. Once you break even on a project or upgrade, it has paid for itself in savings. The savings will continue, adding value to the project beyond the investment. At this point, the project is like a savings account that automatically makes deposits, continuing to save you money far into the future.
- Once complete, how long will this continue to save me money? (Is this a “once and done” project, such as many air sealing projects, or is it something like an energy star appliance that will, sometime in the future, need to be replaced?)
Your personal budget – Even if you know a project will eventually save you money, some projects may not be reasonable options for your personal budget. Consider tackling some DIY projects that do not require a large investment. Also, remember that your TOTAL cost needs to be taken into account when making budgetary decisions.
Example 1: Air Sealing Duct Work – If an air-sealing project is determined to cost you $100 to complete as a DIY and is estimated to save you $10/month in energy savings, you will have paid for the project in 10 months and will continue to save $10/month into the future.
- Initial Cost $100
- Months to recover cost 10
- Annual savings $120/yr
- Amount saved after 1 year $20 (Savings – Cost)
- Amount saved after 5 years $500 (Savings – Cost)
- Amount saved after 10 years $1,100 (Savings – Cost)
Example 2: Installing 20 Energy Star CFL light bulbs in place of incandescent bulbs – The bulbs will cost about $56 and will save approximately 83%. Each year you will save approximately 1,358 kWh of electricity and $153. Over the life of the light bulbs you will save approximately $954 in electricity costs and $48 in equipment replacement costs. By choosing ENERGY STAR you will reduce emissions by approximately 2,091 pounds of carbon dioxide annually, which is equivalent to the emissions reduction of not driving your car for 72 days.
- Initial Cost $ 56
- Months to recover cost 4
- Annual Savings $ 153
- Amount saved after 1 year $ 97 (Savings – Cost)
- Amount saved after 5 years $ 612 (Savings – Cost)
- Equipment Life Cycle 7.3 years
- Life Cycle Savings in electricity $ 954
- Life Cycle Savings in equipment replacement costs $ 48
- Total Savings over lifetime of bulbs $ 1,002
Additional questions to ask yourself when setting priorities for projects:
- Which of these projects will add the most value to my home?
- How long do I plan to own my home?
- I am a renter. What projects make sense for me? (See Resources for Renters)
- I have identified some comfort issues in my home such as drafts. Which of these projects will most effectively add to the comfort of my home?