Energy-efficient homes, courtesy of federal tax credit
An expiring tax credit is pushing homeowners to boost energy efficiency. Can it work for you?
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Experts say audits help homeowners prioritize and make long-term plans for improvements. The next step may be to address items that seem most pressing, such as replacing a drafty door or insulating an attic crawl space. Since labor costs don't count toward the tax credit, do-it-yourselfers arguably get the most bang for their bucks, since all expenses can go toward qualifying materials.Skip to next paragraph
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For Shari Wise of Baltimore, the place to begin was obvious: new, energy-efficient windows. Her old metal windows had been drafty, cold to the touch, and difficult to open. She spent $3,000 last year to replace six windows downstairs and paid another $1,700 this year to replace four more upstairs. After subtracting labor costs, she's still able to claim several hundred dollars in tax credits, which helps since she's unemployed and her husband, Robert, is out of work with an injury.
"We paid less than we would have paid for a cheaper window because we got the reimbursement," Ms. Wise says. "And we love the new windows."
To save even more, combine incentives
To make the most of the federal tax credit, homeowners can combine qualifying projects with other incentives, as Berke did at his Exeter, N.H. home. These might be offered by utilities, states, or municipalities. Schwab's tip: Check with a municipality to see if it has received an Energy Efficiency and Conservation Block Grant. If it has, then local public money is probably available to bring out-of-pocket costs down even further.
The path to tighter homes can be fraught with pitfalls, however.
Homeowners need to be sure to hire qualified auditors. Credentials include training through the Home Energy Rating System and the Building Performance Institute. The Sierra Club's Green Home project lists approved auditors at sierraclubgreenhome.com/provider-search.
Another trap: products promoted as qualifying for the tax credit that really don't. Even the experts fall for this one. Tom Simchak, a research associate who studies tax-credit programs for the nonprofit Alliance to Save Energy, paid $350 for an Energy Star-rated exterior door that a vendor touted as eligible for the tax credit. It wasn't.
"You can't necessarily trust what the vendor says [about a product's eligibility], but you can trust the manufacturer," Mr. Simchak says. Next time, he says, he'll take his own advice and look for certification statements in product paperwork or on manufacturers' websites.