Upgrade Energy Efficiency with Government Money

The combination of rising fuel costs, increased environmental awareness, and the greater availability of affordable eco-friendly upgrades present homeowners with a great opportunity to upgrade their residence. Both state and federal governments are offering fantastic programs to help offset the cost of such energy upgrades.

Homeowners interested in improving energy efficiency should start with an energy audit. An energy auditor will come to your residence and perform a service very similar to a home inspection; however, focused solely on the efficiency of your heating system, windows, insulation, and appliances. The net result will be a detailed report giving your home an energy efficiency rating on the Home Energy Rating System (HERS) scale – be sure to ask for an explanation as there is one scale for pre-2006 and one scale for post. The energy audit will give you a clear picture of where your money will reap the best return on energy efficiency upgrades, as well as set a baseline for the “as-is” state of your home, and eventually, the efficiency of the “to-be” state.

The most common areas of deficiency are windows, insulation, and appliances, all of which can be upgraded with assistance from state and federal government programs. When considering which upgrades to undertake, keep in mind that the upfront cost is only part of the equation, years of discounted utility bills should also be considered in your analysis. For example, an energy star rated refrigerator costs less than half as much to operate per month as a 10 year old refrigerator, so you need to amortize the costs. As always, make sure that any upgrade is done by a reputable, licensed and insured company.

Once your upgrades are done, the next step is to apply for your tax credits. The most pertinent programs for common consumers are the Federal Residential Energy Efficiency Personal Tax Credits and the proposed Massachusetts Department of Energy Resources Energy Star Rebate Program. The Federal program credits you up to 30% of your upgrade cost with a $1,500 maximum.  The Massachusetts DEOR program is slated to receive $6.2 million in funding under the American Recover and Reinvestment act, to give consumers rebates for energy star appliance purchases. The DEOR is a program to recycle old appliances and replace them with new, energy star rated ones. At this time, there are no specifics on exactly what the limit per household would be and how it would be distributed – I would estimate it would be for one to two appliances, the major energy eaters such as refrigerators and washer/dryers, additional details and program logistics are forthcoming following the program’s announcement in late October 2009.

The net result of any energy efficiency upgrade will be hundreds of dollars per year in tax savings and energy costs, as well as a more valuable and marketable home.