Dear EarthTalk: Since Obama took office, have any new incentives been put in place for homeowners looking to increase energy efficiency and reduce the overall environmental footprints of their homes?
In fact, yes. Homeowners can get up to $1,500 back from the federal government for any number of energy efficiency upgrades at home. If you upgrade to energy efficient insulation, windows, doors, heating, air conditioning or water heaters between January 1, 2009 and December 31, 2010, you are eligible for a tax credits of up to 30 percent of product costs.
The credit is capped at $1,500 combined; meaning it only applies to $5,000 in total costs. More details are available at the website of the Tax Incentives Assistance Project, a coalition of public interest nonprofit groups, government agencies and other organizations focused on energy efficiency.
Of course, the Obama administration is also thinking long term, and would like to leave its mark in furthering efforts to wean ourselves off foreign oil and increase our production and use of homegrown clean renewable energy. In light of such priorities, tax credits are also available for 30 percent of the cost – with no upper limit – on the installation of renewable energy equipment at home, such as geothermal heat pumps, solar panels, solar hot water heaters, small wind energy systems and fuel cells.
Homeowners won’t get the money back when they initially pay for equipment or upgrades, but they can add the credit amount to their overall tax refund, or deduct it from what they owe, when filing their federal income tax forms at the end of the year. Unlike tax deductions, which merely lower the total amount of taxable income, tax credits reduce dollar-for-dollar the amount of tax owed.
Homeowners should know that they can also get federally backed mortgages to pay for a variety of energy efficiency measures, including renewable energy technologies, on their new or existing homes. The federal government supports these loans by insuring them through the Federal Housing Authority or Veterans Affairs programs, allowing borrowers who might otherwise not qualify to pursue upgrades, and securing lending institutions against loan default.
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