Energy Tax CreditAre you missing an opportunity for an energy tax credit or home improvement rebate? There’s free money available by way of incentives if you know where to look.

Many of us have the best intentions when it comes to conserving energy and natural resources but few realize there are rewards available at the local, state and federal levels.

If you plan on remodeling your kitchen or bathroom, are renovating an older home you just bought or are just updating areas of your home or business, don’t pass on an opportunity to get something back.

In this post I will cover how to find an energy tax credit and what type of home improvement rebates or incentives may be available in your area.

What is an  Energy Tax Credit?

An energy tax credit is one of many available incentives offered to homeowners and property owners who make their residences or properties more energy efficient. This means you make energy-efficient improvements through purchases and/or sustainable design methods.

Energy tax incentives can come in the form of tax credits or tax deductions however, the two are not the same.  You get more return on your dollar spent with a tax credit because it reduces your tax dollar-for-dollar whereas a tax deduction only removes a percentage of your tax liability.

The short video below better defines the types of incentives available to give you an idea of the opportunities to save money on your home improvements or new construction projects.

Available Energy Incentives as of January 2013

  • 38 states offer property tax incentives for energy efficiency

  • 41 states offer low or no interest loan programs for renewables purchase

  • 22 states plus the Virgin Islands and Puerto Rico offer grant programs for saving energy

  • 28 states plus Puerto Rico offer sales tax incentives for energy efficiency

Energy-saving incentives aren’t restricted to the just the Energy-Star tax credit you get for qualified appliance purchases but can also be found, depending on where you live, in many different improvement areas:

  • Did you know that old refrigerator in your garage may get you $50 or more and hauled away for free? Consult your power company.
  • Credits are frequently available from your local utility if you install a new qualified window air conditioner, heat pump, furnace or central air system. These are usually a one-time credit but can up to $1,000 or more.
  • Repairing or replacing a leaking or inefficient duct system for your heating and cooling can yield some generous rebates. The qualifications will differ based on your location but will likely require that 50% or more of your ductwork is replaced. A local utility may require testing by a qualified, registered contractor under an air performance program. Repaired ductwork systems can get you up to a $2,500 rebate (contingent on Program requirements). A percentage of up to 50% or more of the cost of the qualified testing may be paid by the local utility.
  • Some utilities will offer a rebate for adding insulation in your attic over conditioned space in your home. Rebates are usually based on a cost per square foot of insulation installed, regardless of the type of insulation.
  • Homes using natural gas for heat, hot water, drying clothes and cooking meals contribute up to 60 percent less emissions into the atmosphere so utilities offer incentives for property owners to choose gas, where available. Rebates are frequently offered for gas cooktops, stoves, water heaters and clothes dryers in lieu of electric. These are offered by the local utility and in addition to any Energy-Star rebates available at the federal level.
  • Changing your thermostat to a Smart thermostat, often offered by localities and furnished and installed for FREE can save you 10% or more on your annual utility costs.

Top Resources for Energy Incentives

Here are the top resources to start with if you want to check out your options for an energy tax credit or other available incentives in your area. Be sure to bookmark No. 1 because this is the most comprehensive, up-to-date resource for everything available at federal and your state levels.

1)     DSIREUSA.ORG – You will likely not find a more comprehensive list available for your state. Just click on your state to begin.

2)     ENERGYSTAR.GOV – Find out what products qualify for Energy Star Rebates and Incentives

3)     State and Regional Organizations for Renewables and Energy Efficiency are found HERE

4)     ENERGY.GOV – Search Federal Resource for Tax Rebates, Credits and Saving across multiple disciplines

The bottom line is there’s money available if you know where to look. Taking the initiative to reduce your overall energy usage by becoming more efficient has its rewards. Not only because you’ll save money on your utilities but because the by-product of your desire to save benefits the environment. How often do you get a “thanks” from the Federal government or the state? It’s there, take advantage of it.

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