Fostering Home Energy Savings

Federal Tax Credits for Energy-Efficient Homes

(Conservation Currents, Northern Virginia Soil and Water Conservation District)

Did you know that certain upgrades to improve the energy efficiency of your home can also help you pay less in federal taxes? If you have been thinking about insulating your attic, upgrading your water heater, replacing your furnace or windows, installing central air conditioning or even going solar, it could be worth your while to investigate the federal tax credits available. For example, you could be eligible for a tax credit of 10 percent of the cost (up to $500) for insulating your home or installing a new storm or exterior door. For replacing your old water heater with a new energy-efficient model, a federal tax credit of $300 could be yours!

The home improvement tax credits are part of a larger set of financial incentives authorized through the federal Energy Policy Act of 2005. The more widely known tax credit for purchasing a hybrid vehicle is also part of this package. Together, the Energy Policy Act’s provisions encourage consumers to reduce energy consumption and the green house gas emissions responsible for global warming.

Asked about the leading source of green house gas emissions in the United States, most of us would say cars, cars, cars. Actually, energy-guzzling buildings (residential and commercial combined) account for the largest proportion of these emissions. According the non-profit Environmental Defense, 21 percent of the green house gas emissions in the United States are due to residential energy use. If we can’t reduce our commute or switch to public transit, and many of us just can’t, we certainly can do something about the energy we use at home.

And why not get a little federal financial pay back for improving our homes and doing our part for the Earth? To receive a tax credit, you do have to remember to claim any energy-efficiency improvements on your federal income tax form at the end of the year. Of course, you must also adhere to the rules and limitations and small print. The guidelines for this program are described quite clearly on the Energy Star (, click on “Tax Credits Under the Energy Bill” at the bottom of the page) and Alliance to Save Energy ( web sites.

Energy Audits: Getting the Most Energy Savings for Your Money

What if you want to reduce home energy use, but aren’t sure how to go about it? One way to find out which home improvements will do the most for you and the environment, is to schedule a home energy audit.

Energy management companies will charge you from $180-400 depending on your needs to analyze your energy bills, inspect your home inside and out, and conduct a blower door test to pinpoint where air is leaking into and out of the home. The report you receive will help you decide how best to invest in creating a more energy-efficient home.

If you like the idea, but don’t want to pay for a professional audit, you can also conduct a self-audit on-line. The Alliance to Save Energy offers a “Home Energy Check-up and Audit” on its web site (

No matter what type of audit you choose, the assessment will be an important tool to help you make the most of your money and conserve energy.

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