Although going green is regarded as the “smart thing” to do, there remains the general idea that transforming your home into a sustainable space is still too expensive. Many people think that the upfront costs of solar panel installation, for example, won’t be paid back until 5 to 10 years down the line.
But if you believe in making a serious investment in energy efficiency or renewable energy (and in the health of the planet), the federal and state governments do offer a wide range of financial assistance options in the form of state rebates and federal tax credits. Basically, these are government-paid incentives to help you save money on your energy bills. Why not let them?
When you upgrade your home or invest in building a more energy efficient residence, you are not only dramatically reducing your energy consumption and saving money on energy bills—you are often also greatly improving the home’s indoor air quality, natural lighting and overall comfort of the home environment for you and your family. Such a change makes for healthier bodies and minds, which also means that you can potentially cut down on costly medical bills and expenses.
If you are interested in state incentives for the purchase and installation of eligible products and systems, note that each state has its own list of companies and institutions (many are utility companies) that offer rebates. The comprehensive list with detailed instructions and contact information can be found at DSIRE.
To benefit from the federal tax credits, the renewable energy/energy efficient systems or products must be purchased or installed in a primary residence or second home which you own–rental properties do not qualify. Manufacturers and retailers should be able to inform you if the product or system meets the federal tax credit criteria. Be sure to keep all receipts and other documents that prove cost and date of purchase and installation, as well as manufacturer certification documents.
Energy efficient home improvements (new construction not eligible)
- 10% of cost, with up to $500 for doors and up to $200 for windows; retroactive from January 1, 2012 to December 31, 2013
- Installation of energy efficient products or equipment including exterior windows like skylights and storm windows; insulation like window films, duct sealing, air infiltration reduction; exterior doors, pigmented metal roofs, asphalt roofs; central air conditioner, electric heat pump, furnaces and boilers, non-solar water heater, biomass stove
*Products and equipment must meet Energy Star requirements
Onsite renewable energy systems (new construction eligible)
- 30% of cost, no cap; retroactive from January 1, 2009 to December 31, 2016
- Includes solar water heaters, solar panels, small wind turbines, geothermal or ground source heat pumps, solar fans
Fuel cells and microturbines (new construction eligible)
- Fuel cells: 30% of cost, up to $500 per .50 kW of power capacity; to December 31, 2016
- Microturbines: 10% of cost, up to $200 per kW of power capacity; to December 31, 2016
For more detailed information and application instructions for federal tax credits, see the EnergyStar website.