August 12th, 2009

From Green Right Now Reports

In the frenzy over the “Cash for Clunkers” program that rewards drivers with up to $4,500 for ditching their old gas-guzzlers in favor of a new fuel-efficient model, many consumers appear to missing a similar though smaller deal on their homes.

ConstructionDeal.com, a Sherman Oaks, Calif.-based web site that helps homeowners find contractors for home improvement projects, did a survey that found nearly 40 percent of respondents were not planning on taking advantage of the $1,500 federal tax credit for energy efficient home improvements. The survey of about 5,000 project owners — primarily homeowners –  also found that 25 percent were completely unaware of the tax credit.

Still, 10 percent of those surveyed said they had already taken advantage of energy efficient home improvements. And ENERGY STAR, a joint program of the US Environmental Protection Agency and the US Department of Energy that helps consumers save money and protect the environment traffic, says traffic to its tax credit web page is skyrocketing.

“Traffic to our tax credit page is up about 500 percent and overall, traffic to energystar.gov is up about 50 percent in the past 5 months,” ENERGY STAR representative Karen Schneider said in a statement.

The tax credit went into effect February 17th, when the American Recovery and Reinvestment Act of 2009 was signed. The official name is “Non-business Energy Property Tax Credit” and qualified home improvements that are ready and available to use between 2009 and Dec. 31st 2010 can receive a federal tax credit for 30 percent of the purchase price – up to a maximum of $1,500. Improvements made during a remodel or addition also can qualify.

All the home improvement products have energy-efficiency requirements. For example, replacement windows must have a U-factor at 0.30 or below and SHGC at 0.30 or below to earn the tax credit. To learn more about various requirements, visit the ENERGY STAR website for more information.

Some of the qualified home improvements include:

• Windows
• Insulation
• Water Heaters
• Doors
• Metal & Asphalt Roofs
• Central Air Conditioners
• Heat Pumps
• Furnaces & Boilers

These improvements can only be made to the primary residence and homeowners will need to keep manufacturer efficiency certifications from products they have installed and the receipt from their contractor. The IRS tax form 5695 will be available in late 2009 or early 2010. Popular home improvements are air conditioners, water heaters, furnaces and new windows. The tax credit will offset the cost of the energy efficient products and in the long run, result in savings through decreased energy bills.

Large green improvements or additions may be eligible for another provision – the “Residential Energy Efficient Property Tax Credit” which also is a 30 percent tax credit but has no dollar cap, second homes qualify and this provision is available until December 31, 2016.

Some of the qualified home improvements include:

• Geothermal Heat Pumps
• Wind Turbines
• Solar Water Heating Systems
• Solar Photovoltaic Panels