Tax Incentives Help Homeowners Trim Energy Costs

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Green Building | January 06, 2009 | by Andrea Nocito

Tax Incentives Help Homeowners Trim Energy Costs

A force of public interest and government agencies is working to ease the financial crisis by revitalizing and adding tax incentives for homeowners across America under the Tax Incentives Assistance Project (TIAP).

TIAP, which includes he Natural Resources Defense Council, and businesses and environmental organizations like the Alliance to Save Energy, provides information on the available tax incentives for reducing a home’s energy consumption through installation of energy-efficient technologies. Home improvements that qualify under the plethora of tax breaks include the purchase of:

- insulating products for walls, windows and doors,

- EnergyStar windows, doors, frames and roofs, and

- energy efficient heating and cooling systems and fans.

Tax breaks for home improvements directly related to energy reduction and efficiency began in 2005 and concluded in 2007. As the country’s economy slowed, it was apparent to Congress and the home improvement industry, that in order to maintain some inflow of money into the industry, and to aid Americans in energy reduction as laid out in the Energy Policy Act of 2005, more incentives are needed.

Many people who desire to be green cannot afford to move to new, energy efficient homes, nor upgrade their homes without financial assistance. Appropriately, Congress is now enabling homeowners who did not use their entire allotment of tax credits, typically between $500 and $2,000, in 2006 or 2007, to use the remaining allotment in 2009. For newer consumers, more incentives have been established offering tax breaks for the purchase of energy efficient technologies throughout 2009.

With these tax incentives, homeowners can achieve more than a temporary price break on purchasing new products. Immediately, home owners will see a reduction in energy bills, a small break that so many need in order to have a bit of extra money to pay the mortgage.

In the long run, energy efficient homes will also be less vulnerable to the rising costs of heating and cooling houses. Additionally, an energy-efficient home will retain more of its value as it is more desirable purchase.

While tax incentives alone won't end their economic woes, struggling homeowners will say, “every little bit helps.”