This is a guest post written by Peter Troast. Peter is the CEO & Founder of Energy Circle Pro.
Heads up: on December 31 of this year, the federal tax credit for residential energy efficiency improvements is set to expire. Unless it’s renewed, any energy efficiency upgrades will need to be made by that date in order for homeowners to be eligible for the credit. The tax credit was put into place to help homeowners cover the upfront cost of energy efficient home improvements like insulation, air sealing, windows and skylights, exterior doors and energy efficient appliances — products and upgrades that save money over time, but whose upfront cost can be enough to make many homeowners shy away from them (especially in this economy).
Long story short: if you’re a contractor, make sure that your customers know about the tax credit before it expires. You can be sure that they’ll be thankful. And if you’re a homeowner, make sure you take advantage of the tax credit while you still can: if you’re thinking about having an insulation upgrade soon, be sure to have it done sooner than later.
For insulation and insulating products, the tax credit provides 10% of the cost, capped at $500, provided the insulation complies with the requirements set by the 2009 International Energy Conservation Code.
This table provides details on other upgrades that are eligible for the tax credit:
So how do you take advantage of the tax credit (or help your customers do so)?
First, go energy efficient: if you’re installing insulation for a customer, make sure it complies with the 2009 International Energy Conservation Code. Check manufacturer’s websites, or the Energy Star website to see if it’s eligible for the tax credit. You can also direct your customers to the IRS Form 5695 (not live on the IRS website soon, but it should be). If you really want to impress them, you could print out the form and give it to them directly. But most of all, be sure to jump on it: homeowners can apply for the tax credit approaching the 2012 tax season, but just remember that installation needs to be complete by 12/31/11.
Moving forward, we can only hope that the tax credit for energy efficiency upgrades will be renewed: it’s a boon for homeowners, manufacturers, contractors and our economy. But if not, don’t fret, there are a number of other tax credits and incentives available, and you can find them all at the Database of State Incentives for Renewables & Efficiency.