Here's a conundrum: it costs money to save money... on energy expenses, that is! While it's obvious that energy conservation measures can reduce your utility bills, many of us wonder how to afford the up-front costs. Here are several options:
Federal Tax Credit for Energy Efficient Home Improvements
If you are ready to do energy efficient home improvements, don’t miss the boat on the federal tax credit which expires on December 31, 2010. The credit is for 30% of the cost of improvements up to $1,500. Only work done in existing homes that serve as one’s principal residence is eligible. New construction and rentals do not qualify. There is no upper or lower limit on income for the energy efficient tax credits.
- Eligible home improvements include HVAC (heating, ventilating, air conditioning) work, biomass stoves (including wood and wood pellets), insulation, roofs (metal and asphalt), water heaters (non-solar) and windows and doors. Tax credits are available through the end of 2016 for solar energy systems, residential wind turbines, and geothermal heat pumps.
- Tax credits are being administered by the IRS (www.irs.gov/contact).
- To apply to the credit, you need to file IRS Form 5695 and submit it with your 2010 taxes, due April 15, 2011. You should save your receipts and the Manufacturer's Certification Statement for your records. For more information, see http://www.energystar.gov/index.cfm?c=tax_credits.tx_index
Financing Home Improvements
Work that is performed by a participating Building Performance Institute Accredited Home Performance Contractor qualifies for financing through any of the options listed below:
1. ENERGY STAR Financing (1 and 2 family owner-occupied only)
Low-interest ENERGY STAR Financing is offered through the Home Performance with ENERGY STAR program. Your contractor can supply you with the current interest rate. The following conditions apply:
* This is an unsecured loan, not a second mortgage or equity loan.
* The limit on the loan is $15,000 or $20,000, depending on your credit score.
* You can select a term of 3, 5, 7 or 10 years.
* Financing is available to owner-occupied 1- or 2-family homes.
2. New York Energy $martSMResidential Loan Fund
Energy $mart Loans are offered through a network of Participating Residential Loan Fund Lenders servicing New York State. The following conditions apply:
* Loans up to $20,000 ($30,000 in the Consolidated Edison service territory) may be obtained on a secured or unsecured basis, at the option of the Lender and the Borrower.
* Your interest rate is bought down by up to 4.0% or 400 basis points, reduced as low as 3.0%, for a term up to ten (10) years.
* Procedures and conditions may vary by Participating Lender, and by loan.
Eligible Improvements for 1-4 Family Homes are those Eligible Measures and Accessories that have been determined by NYSERDA to meet the Home Performance with ENERGY STAR® Program guidelines.
3. Homeowner Financing Incentive
If you choose not to use either ENERGY STAR Financing or the New York Energy $martSM Loan Fund, you may be eligible to receive 10% of the cost of eligible energy efficiency improvements, up to a maximum incentive of $3,000.
4. Additional Incentives Based on Income Eligibility
Households with an income equal to or lower than 80% of state or area median income, whichever is greater, can receive additional financial incentives through Assisted Home Performance with ENERGY STAR®. That's an income of nearly $60,000 a year for a family of 4 in most counties and higher in several downstate counties. If you are income-eligible, you may receive assistance to cover up to 50% of the cost of energy improvements. Contact Energy Finance Solutions at 1-800-361-5663 to see if you are eligible.
Single Family: The building occupant's income must be less than or equal to what is listed in the income guidelines for the number of people living in the household. A 50% subsidy up to $5,000 may be available.
Renters: Income-qualified tenants can receive up to a 50% subsidy towards the purchase of ENERGY STAR appliances and lighting or other energy-reducing products. Use the income guidelines to determine if you are income-eligible.
2-4 Family Building Owners: Assisted Home Performance with ENERGY STAR will perform work in 2-4 unit buildings where either the owner is income qualified and occupies one of the units, or tenants are income-qualified. An income qualified owner that occupies a unit in a 2-4 unit building can receive a subsidy of up to $5,000 for the whole building without any income verification required for the tenants. A higher subsidy, up to a total of $10,000 per building, may be available if tenants also are income eligible.
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