Discover the Financial Principles of the Bible

Taking Advantage of Energy Rebates

The world has gone green right now. Rather, the world is thinking it would like to go green. Green is the hot buzz word flying all over the globe with countries from the United States to industrial China all paying lip homage to the fact that now is the time to change from the dirty, massive, polluting, fossil-burning smoke stacks and shift to clean, renewable, safe technology…and most of all, green technology. Well, that’s all well and good but what does it mean for the average consumer? In America, it means you can help the environment and save some money! The United States Congress has passed several initiatives to provide tax credits to the citizens wise enough to take advantage of them. Those savvy enough to consider replacing and improving their home with energy efficient upgrades will see a tangible benefit in the form of the Tax Credit. It’s really win-win situation. The consumer wins because the cost of replacing/upgrading their appliance is reduced significantly and the U.S wins because of the tremendous efficiency that is gained, lessening the strain on the energy grid and improving our carbon footprint. Although a lot of things in Congress may not make sense but this one does.

So what exactly is this tax credit? How do I get one? For complete information I recommend that you visit the government’s energy star website.

This is the government website that contains all the information regarding the energy tax credit initiative but I can summarize most of it for you here. The Federal government will reimburse you 30% of the cost of your qualifying home improvement up to a $1,500 maximum. So, for instance you decide to install a new energy efficient Furnace (which I did recently…not by choice sadly), the federal government will give you 30% of the total cost up to $1,500. In my case, I had a new 95% energy efficient furnace installed for $2,500, the tax credit I received was $750, or 30% of my cost. A nice little discount but you’d better hurry if you want to take advantage as this tax credit is set to expire on December 31, 2010. Furnaces, however, aren’t the only improvements that qualify for the credit, the complete list is much more exhaustive:

• Biomass Stoves
• Heating, Ventilating, Air Conditioning (HVAC)
• Insulation
• Roofs (Metal & Asphalt)
• Water Heaters (non-solar)
• Windows & Doors

But there’s more, the Tax Credit also includes a separate section for Geothermal Heat Pumps, Small Wind Turbines and Solar Energy Systems. The credit is still 30% but there is no upper limit which means if you bought and installed a $10,000 Geothermal Heat Pump, the government would credit you $3,000 towards it. This credit lasts until December 31, 2016.

At least one thing to keep in mind is that not only do you get a considerable tax credit from the government but you will also see decreased heating bills from the improved efficiency of your furnace (or similar energy efficient upgrade). A handy resource from www.energysavers.gov shows the amount you’ll likely save from your new furnace:

In my case, going from a 60% to a 95% efficient furnace made a significant reduction in my heating costs. Granted you will probably only see that savings during the winter months but even at that you can see how the improvement will make a significant and positive change in your monthly finances. In addition to the Federal Tax Credit, my local utility company, MidAmerican Energy also provides an incentive to upgrade by offering a $325 rebate. I recommend checking with your local company to see if they may offer something similar. When all was said and done, my $2500 95% energy efficient furnace cost me just a little over $1400! Now is a great time for you to give a serious look at upgrading and improving the efficiency of your home. The credit won’t last forever so take advantage of it while you can. Just consider it as a limited time clearance sale, 30% discount is considerable and worth doing while its available. The efficiency you gain from your improvements might make up the other 70% fo the cost a lot sooner than you think.

Just another recommendation on ways to save and spend your money wisely.

 

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Filed in: Budgeting, Christian Finance, Family Finance, Stewardship

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