Goldsborough Design Build

Homeowners who make energy efficient improvements to their home or replace outdated appliances may be able to take advantage of several tax credit and rebate programs open now or set to begin in early 2010.

Navigating through these American Recovery and Reinvestment Act programs—some of which are run by the states, by the U.S. Treasury Department (in the form of tax credits), or by the U.S. Energy Department (DOE)—isn’t easy.

Below is Jamb Sessions’ effort to untangle the string of initiatives—with details from Washington, D.C., Maryland, and Virginia provided where possible—to help you maximize the benefit of recent or planned upgrades. (As always, contact your tax advisor for professional advice specific to your situation and click the links below for complete details on each program.)

Appliance Rebate Programs (federally funded but administered by the states)
Information link: http://apps1.eere.energy.gov/news/daily.cfm/hp_news_id=200.

State energy offices will administer a new $296 million federally funded energy efficient appliance rebate program. People who buy certain Energy Star–qualifying products—ranging from central air conditioners to dishwashers to water heaters—can get anywhere from $50 to $250 back, depending on the item, purchase price, and other state-specific details, according to U.S. DOE.

Here’s how much is available for the appliance rebate programs in our area, with brief descriptions of what each jurisdiction is saying about its plans for handing out the money (some figures are rounded; download the state-by-state allocation chart here):

• District of Columbia — $567,845 (D.C. Department of the Environment)

From a notice on DDOE’s website:

“Appliance rebates for ENERGY STAR refrigerators, washers, dishwashers and heat pumps are coming in April. If you’d like to be notified when our program begins, please give us your email address below. DDOE promises not to email you for any other reason.”

• Maryland — $5.41 million (Maryland Energy Administration)

From a fact sheet, here is what the MEA says about its appliance rebate program, which is set to roll out in winter/early spring 2010:

“Maryland has proposed a $300 rebate for ENERGY STAR electric heat pump water heaters, a new and very efficient piece of equipment. Stimulus funds will also provide at least $25 for super-efficient clothes washers and refrigerators. Most utilities currently (or will) offer a $50 rebate for ENERGY STAR clothes washers and refrigerators, bringing the total rebate to at least $75. These dollar amounts are subject to change, as our program has not yet been approved [by DOE]. BGE, Pepco, and Delmarva Power currently offer other appliance rebates as well; Allegheny and SMECO will offer rebates beginning in January 2010 … . Allegheny and SMECO programs are not retroactive.”

• Virginia — $7.45 million (Virginia Division of Energy)

This is what VDE says on its website about its program:

“DOE is providing to all states and territories allocations of ARRA funds to set up new, or augment existing, energy and water efficient appliance rebate programs. The money is being divided up by state, according to population. Virginia is preparing an application for $7.45 million to supplement existing or new efficient appliance rebate programs managed by utilities and other suppliers of energy and water. The deadline for Virginia’s application to DOE is October 15, 2009. Check this page after October 15, 2009 for additional information.”

Barbara Simcoe, state energy program manager with VDE, told Jamb Sessions that “we hope to start [the rebates] in spring of 2010.” She said the state is still working with the federal government to determine the types of appliances that will be included in the program and how rebates will be processed. Simcoe said for some appliances, customers will likely apply for their rebate through utilities; applications for other rebates will probably have to go through the state. However, she said only those appliances or systems purchased on the day Virginia’s program starts will be covered by the rebates.

You can keep tabs on individual state programs—which the federal government is still in the process of approving—on this website, which is updated regularly. So far, D.C., Maryland, or Virginia are not listed as having official start dates for their rebate programs.

Federal Tax Credits for Energy Efficiency
Information link: http://www.energystar.gov/index.cfm?c=tax_credits.tx_index.

Federal Tax Credits for Consumer Energy Efficiency are different from the state appliance rebate program (see a comparison of the two programs here), but also apply to the purchase of energy efficient products or renewable energy systems.

Different credit programs apply, depending on the system installed:

A. Existing homes and principal residences. According to DOE, a 30 percent tax credit for the cost of the following appliances or systems, up to $1,500, is available through December 2010 (click the link above to access more details on each of the qualifying products):

• Biomass stoves
• Heating, ventilating and air conditioning
• Insulation
• Roofs (metal and asphalt)
• Water heaters (non-solar)
• Windows and doors.

B. Existing homes and new construction. Two programs that do not expire until December 2016 are designed to reward homeowners who install advanced energy efficient products and systems.

One program, which has no upper limit, provides a 30 percent tax credit for the cost of these items:

• Geothermal heat pumps
• Small residential wind turbines
• Solar energy systems (read about Maryland's solar energy program here).

Another program provides a tax credit of 30 percent of the cost, up to $500 per 0.5 kilowatt of power capacity, for the purchase of residential fuel cells and microturbines.

This frequently asked question document provides homeowners with information on claiming the credit, including how to fill out the IRS forms, such as Form 5695. The IRS counts the credit when the product is “placed in service”—installed and ready to use—so something purchased in 2009, but installed in 2010, would not go on 2009 tax returns. (Here is additional information on carrying credits over from year to year; consult the top-10 FAQs here.)

More Resources
Click on our Ideas Showcase to download a brief fact sheet that reviews these programs.

Here are links to other websites with more information:

• IRS — Energy Incentives for Individuals in the American Recovery and Reinvestment Act, http://www.irs.gov/newsroom/article/0,,id=206875,00.html

U.S. DOE — Rebates, Tax Credits, and Financing,  http://www.energysavers.gov/financial/index.cfm/mytopic=70020

• U.S. DOE — State Energy Efficient Appliance Rebate Program,
  http://apps1.eere.energy.gov/news/daily.cfm/hp_news_id=200, and state energy office contacts,
  http://apps1.eere.energy.gov/state_energy_program/seo_contacts.cfm.

• U.S. DOE — ARRA Weatherization program, http://apps1.eere.energy.gov/weatherization/recovery_act_faqs.cfm.

Contact us to discuss your home-remodeling plans.

Whenever the word “caulk” turns up in the national news—which is almost never—our ears perk up. When we hear the phrase “cash for caulkers” bandied about, our interests are further piqued. After all, caulking—sealing cracks around trim, fixtures, windows, doors, and everywhere else—is a large part of any home-remodeling project.

Now that this routine task is being tied to national home energy efficiency goals, can you get cash for caulking—i.e., weatherizing—your home? The short answer is, not quite yet.

++(See Jamb Sessions' companion article on the many tax credit and rebate programs in effect right now.)++

According to a White House fact sheet, President Barack Obama recently called on Congress to “consider a new program to provide rebates for consumers who make energy efficiency retrofits. Such a program will harness the power of the private sector to help drive consumers to make cost-saving investments in their homes.”

This is Washington-speak for saying homeowners might be able to get cash for caulking if Congress decides to pass legislation—and fund—such a program … sometime in the future.

But on the heels of the successful “cash-for-clunkers” program—which paid people to turn in their gas-guzzling jalopies for more efficient automobiles and which was credited with spiking car sales—lawmakers may be eager to see if they can jumpstart job creation with a similar rebate program for homeowners. After all, the national unemployment rate is still at 10 percent, one number that doesn’t please lawmakers who must run for reelection in 2010.

This means that cash for caulking could be in the offing sooner rather than later. According to senior administration officials, who briefed the public on these and other economic stimulus plans on Dec. 8 (Jamb Sessions got  a transcript of the briefing from the U.S. Department of Energy press office), the cash-for-caulkers idea: “has a win/win quality of both having the potential to save consumers money by lowering their energy bills and also put[ting] people back to work, particularly in the hard-hit construction sector.”

The senior officials, however, were mum on what the overall size of such a weatherization program would be, and said they were focusing on working with Congress to “design this in such a way that we can get the maximum impact in the short term and pull forward investments in the short term.” (Jamb Sessions is awaiting callbacks from the White House press office clarifying funding for this program.)

And that’s Washington-speak for … stay tuned. When we find out more about cash for caulkers, we’ll post the information.

Contact us anytime to talk about weatherization in the context of home remodeling.

Can we retrofit our way out of the recession? The White House—with help from the American Recovery and Reinvestment Act (ARRA)—seems to think so. Vice President Joe Biden the other day joined with U.S. Department of Energy and other administration officials to release Recovery Through Retrofit, a report billed as a blueprint for green jobs.

The idea is to create a self-sustaining “retrofit industry,” seeded with ARRA money and tax credits and fueled by need: millions of inefficient homes.

After all, as administration officials point out, existing techniques and technologies in energy-efficiency retrofitting can cut home energy use by 40 percent and reduce greenhouse gas emissions by up to 160 million tons. These actions can slice $21 billion from homeowners’ energy bills each year.

Goldsborough Design Build—a Design/Build firm and not a retrofitter, per se—takes extra steps to ensure that all of our remodeled projects are as efficient as possible:

• When we cut ventilation holes into ceilings,  we foam around the openings before we put the insulation back to ensure that there is a quality air barrier.

• We pay our insulator to install an air-stopping package before drywall is installed. This is not required by local building code requirements, but is an important part of a quality air barrier.

• And many of our top-of-the-line windows, such as Pella Architect Series, are already manufactured to meet the Energy Star requirements for our region.

In addition to encouraging and funding energy retrofits—including giving consumers better information about energy efficiency and sounder ways to estimate the costs and benefits—ARRA includes a host of energy-related tax credits for qualifying home projects. In fact, some GDB clients have taken advantage of these ARRA credits for window and appliance upgrades.

“These new, expanded credits encourage homeowners to make improvements that will make their homes more energy efficient,” IRS Commissioner Doug Shulman said in April. “People can improve their homes and save money over the long run.” (Consult your tax advisor for details.)

And more is being done to reduce the barriers to energy-related home improvements: The Energy Department recently announced $454 million in “Retrofit Ramp-Up” funds for innovative retrofit projects, including for neighborhood-scale green home and community projects. A separate program will provide federal dollars to support state-run pilot projects designed to help homeowners finance renewable energy systems and retrofits through their property tax bills.

If the government can use its leverage for retrofit projects that create jobs, improve the planet, and put pennies in your pocket, it might help turn this recession into a sustainable recovery.

So maybe remodeling can save the economy after all.

Contact us any time to discuss how GDB can help you boost your home’s energy efficiency.