Many of us are always looking for ways to save money, be it in our day-to-day expenses, or larger purchases such buying a car. Often times, we look to getting the best deal we can get upfront, perhaps through bargaining or paying in cash.
For certain expenses, however, we need to look beyond just the initial purchase costs to save money. We often need to dig deeper to find the true savings opportunity that’s available.
A good example of this would be the tax credits that are available for energy efficient home improvements.
According to the Energy Star website, there are tax credits available for purchases of specific energy efficient and renewable energy products for the home. The savings are noteworthy, as they have seemingly generous limits, and some cases there are no limits.
Here is an summary of the tax credits that were noted:
Group 1
Items Covered:
- Windows and Doors
- Sliding glass doors
- Garage doors
- Storm doors
- Storm windows
- Insulation
- Roofs
- Metal
- Asphalt
- HVAC
- Central Air Conditioners
- Air Source Heat Pumps
- Furnaces and Boilers
- Water Heaters
- Gas
- Oil
- Propane
- Electric Heat Pump
- Biomass Stoves
Tax Credit and Restrictions
- Up to $1,500 maximum, at 30% of cost
- Existing homes, not new construction
- Must be primary residence
- 2010
Group 2
Items Covered:
- Geothermal Panels
- Solar Panels
- Solar Water Heaters
- Small Wind Energy Systems
Tax Credit and Restrictions:
- 30% of cost, with no upper limit
- Existing homes and new construction
- Does not have to be primary residence, vacation homes are eligible
- Through 2016
Group 3
Items Covered:
- Fuel Cells
Tax Credit and Restrictions:
- 30% of cost, up to $500 per .5 kW of power capacity
- For existing principal residence or new construction that will be principal residence, excluding vacation homes
- Through 2016
As can be seen, there are plenty of details and restrictions. Therefore, I would suggest talking to a tax professional for further information before taking action on these opportunities. One could also look toward tax credits for 2011 as well.
That said, if you have some work to do on your home, or know anyone that does, it’s worth taking a closer look at this. Energy efficient practices are good for our planet, and could save you some money too. That’s a good combination, don’t you think?
I think we have come a long way on focusing on energy efficiency. I think back to the 70s when I was a kid and nothing was efficient. Cars were so dirty and energy efficiency just wasn’t a priority. I am quite happy with the progress that has been made, and we obviously still have a long way to go.
I have replaced most of my appliances in the last couple years, and the energy star rating was a big part of the decision we made for each purchase.
Everyday Tips – I had never paid attention to energy efficiency until the last year or so, believe it or not. It’s funny how one can pick up a new way of thinking so quickly, and adopt it while wondering how they could have not done so a long time ago.
Energy efficiency is a solid way to save. When we bought our home, it had absolutely no appliances. We balanced price with energy efficiency and have been really happy ever since – $70-$160 electricity bills year round and appliances that are going on to 3-4 years. 🙂
BFS – those are some pretty low bills. I get the feeling that the overall cost of living is pretty good in much of Texas.
Hi There,
This is the common mistake that I see people making. A good example that I noticed was ceiling fans. My wife and I were shopping for ceiling fans recently and we were settling on a more expensive energy star rated fan. Another couple our age were looking and the wife gestured towards the one that we were looking at and the gentleman with her shook his head “no.”
After they left, I couldn’t help but to be nosey and looked at the one they walked away with. The electricity alone was nearly double! And the amount of air it moved was maybe about 10% higher than the one we were looking at. Over the life of the fan, I can’t help but think that we will have a nicer looking fan (in our opinion) that will save us far more money than the $30.00 they saved!
Sure, there might have been other reasons behind their purchase, but to us, nearly infinite additional cost is enough for us to say no!
Thanks,
Timothy
I do think there is a delicate balance between energy efficiency and price for us as well. We certainly purchase energy efficient appliances but we are mindful of getting good deals as well. One example of a bad deal were the energy efficient cars. Most of them, you will have to drive them to the moon and back in order to justify the price difference. Kind Regards, Shawn