5 Money-Saving Energy-Efficient Home Improvements
Organizations such as the United States Department of Agriculture Programs and Grants and the United States Energy Department regularly offer residential energy credit incentives and perks in order to encourage more homeowners to reduce their carbon footprints. As a result, your energy consumption and utility bills may be reduced. However, there are numerous home improvement options available. We've compiled a list of the top 5 energy efficient home improvements to make in 2022 for government incentives, tax breaks, and rebates to help you narrow things down.
Heating and Cooling.
Why Make the Change:
Air conditioning and heating systems work hard to keep our homes comfortable all year. However, there is a cost. In fact, HVAC systems typically consume the most energy within a home, accounting for 35 to 40 percent of total energy consumption. If your unit is more than ten years old, requires frequent or costly repairs, or is causing problems with temperature regulation in your home, it's time to replace it.
If your system is 10 years old or older, a newer system can save you up to 20% on your utility bills. Long-term savings can amount to hundreds of dollars per year.
Available Incentives and Rebates:
Local utility companies will typically offer rebates for high-efficiency AC systems, including those with a SEER rating of 15 or higher. Because deals vary by region, it's best to contact your local energy provider. Inquire about the rebates available for new air conditioners in your area.
The Department of Energy also has a searchable rebate database based on zip code.
There are also federal incentives available for energy-efficient home improvements, such as new HVAC systems. The Database of State Incentives for Renewables and Efficiency has a searchable by zip code list of energy-efficient incentives available in your area.
Solar Power.
Why Make the Change:
Rising electricity costs are typically the catalyst for homeowners to investigate solar energy. In fact, according to a recent Modernize homeowner survey, nearly 80% of homeowners cited the desire to save money on utility and electric bills as the primary motivator for starting a solar energy project.
Savings from solar energy will vary depending on the time of year, region, and size of the panels. However, homeowners can save up to $40,000 over the course of 20 years.
Available Incentives and Rebates:
For years, tax breaks for solar projects have been an enticing perk for homeowners. The Residential Renewable Energy Tax Credit is worth up to 26 percent for systems installed between December 31, 2019 and January 1, 2023. Following that, the percentage drops to a 22 percent rebate.
Additional incentives for homeowners may be available depending on where you live. A number of federal financial incentives for renewables and efficiency are listed in the Database of State Incentives for Renewables and Efficiency. Modernize recommends that you discuss rebates and additional incentives with your solar installer to ensure that you have a clear understanding of how incentives will apply to your future expenses.
Local utility companies will usually provide rebates for high-efficiency air conditioning systems, such as those with a SEER rating of 15 or higher. Because offers differ by region, it is best to contact your local energy provider. Inquire about new air conditioning unit rebates in your area.
The Department of Energy also maintains a searchable database of rebates by zip code.
There are also a number of federal incentives available for energy-efficient home improvements, such as new HVAC systems. The Database of State Incentives for Renewables and Efficiency has a list of energy-efficient incentives available in your area that can be searched by zip code.
Replacement Windows.
Why Make the Change:
Because of the amount of air that can leak in and out, windows play an important role in your home's overall energy efficiency. According to a Department of Energy report, windows account for 25 to 30 percent of residential heating and cooling use.
That means that, even if your HVAC system is newer, your windows may be reducing the efficiency and ability of your home to regulate temperatures.
Energy efficient — also known as energy saving — windows are designed to keep your home more insulated, saving you money.
Energy Star windows, which adhere to strict energy efficiency guidelines established by the United States Environmental Protection Agency, can save homeowners in cooler climates an average of 12% on energy costs. Windows with low-emissivity coatings, on the other hand, can keep homes in warmer climates regulated on the inside by reflecting air conditioning back into the home's interior and reducing solar heat gain.
Available Incentives and Rebates:
Energy-efficient window replacements may qualify for a variety of tax breaks and incentives, including the noncommercial energy property tax credit. This benefit is in effect until 2023, after which it will be phased out.
Until 2014, an Energy Star tax credit of up to $500 was available for anyone installing Energy Star windows in their homes. Though that has since expired, other local incentives continue to exist. Mail-in rebate programs for Energy Star windows, for example, have been observed in areas such as West Oregon and Colorado Springs. To encourage homeowners to upgrade, some locations will also offer low-interest loans. Modernize suggests contacting local window installers and distributors to learn about available incentives and rebates in your area.
Roofing.
Why Make the Change:
Believe it or not, your roof can have a significant impact on the energy efficiency of your home and, as a result, your electric bills. Because, unless your roof is always in the shade, it is exposed to direct sunlight for hours on end. This exposure raises the internal temperature of your home, causing your HVAC system to work harder.
As a result, "cool roofs" are celebrated for their ability to reflect sunlight, absorb less heat than a standard roof, and keep your home at a comfortable temperature using a special coating or specialty tiles. Cool roofs can keep a house at least 50 degrees cooler, saving energy and money. According to an Energy Star study, an energy-efficient roof can reduce peak A/C demand by up to 15%.
Available Incentives and Rebates:
Currently, there are fewer tax breaks for energy-efficient roof replacements than there were several years ago. But that doesn't mean there aren't any opportunities to save money. According to the Internal Revenue Service (IRS), solar roofing tiles and solar roofing shingles may qualify for a residential energy efficient property tax credit in some cases. It is critical for homeowners to consult with a reputable roofing contractor. They can assist you in determining what types of local and regional incentives are available.
Home Improvements.
Why Make the Change:
It's not common knowledge that some home improvements are tax deductible. It usually depends on whether the projects are classified as "capital improvement" or "repair."
Capital improvements are defined as anything that increases the value of your home and makes it more desirable. It does not include things like repairing a broken pipe, but it does include things like installing a pool or an outdoor grilling station. These improvements may be eligible for tax breaks.
Available Incentives and Rebates:
Along with the items we've already discussed, such as replacing windows or HVAC systems, there are several other home improvement projects that qualify as capital improvements. They can include things like installing a stairlift or constructing a home office.
Medical home improvements can be deducted as a medical expense during tax season. Other examples include widening doorways for wheelchair access and adding a walk-in tub in addition to installing a stairlift. The improvement project must be something you can demonstrate to a doctor prescribed as necessary for your health.
Home office improvements may also be tax deductible. However, it must be a separate office space. That means it can't be a multi-purpose room corner or a dining room table that also serves as a desk. Upgrades to a free-standing space that can be used entirely for work purposes, such as a workshop or office, may qualify for a tax write-off.
With so many residential energy credits at your disposal, you can choose the home improvement that will save you the most energy and money.
