Federal Tax Dollars at work - money for saving on energy
Our neighbor really enjoys his newly replaced air conditioner at his house. The A/C was subsidized by a federal tax rebate. So your car isn’t a clunker? You’re not buying a new home? Maybe your air-conditioning unit is on the fritz? Alternatively, perhaps you have always wanted solar panels. Then there is a tax break waiting for you, too.
Although there hasn’t been much hype surrounding these credits and deductions-all increased or expanded by federal stimulus bills passed this year and last year-retailers say sales of new, energy-efficient products are beating expectations in the midst of the recession. What is the reason for the hype? Right now the prices are that good that hoemeowners can hardly resist.
You may pay the same amount for a new air conditioner as you did for the one you bought about 20 years ago. However, they are a lot more energy efficient as the older units. Ask your A/C guy, and he will tell you what has to come out of your wallet and what not. The combination of a rebate from Florida Power & Light, the manufacturer and a $1,500 credit on your taxes next year means you will pay probably $2,000+ less for a medium size A/C unit. On top of that, the family electric bill will be a lot less than it used to be in the previous months, and that will continue month for month - year for year. Don't wait too long, it might not be worth repairing your 15 year old unit since you could experience a dramatic monthly saving with a more energy efficient one.
Any air conditioner that qualifies for the tax credit will most likely qualify for the FPL rebate. The reason is that the Federal energy efficiency requirement is more stringent than the power company’s. However, you need to be careful. Don't take a company's word that their product qualifies. Get a written statement from the manufacturer explicitly stating that the item qualifies for the rebates.
Federal stimulus laws also allow homeowners to get a tax credit of 30% of the cost of energy efficient windows, doors, water heaters (solar ones and non solar ones) , air conditioners and furnaces, up to a maximum of $1,500. Just keep in mind: if you max out the credit on your new A/C, you can’t use it for one of the other items. But if you don’t use any or all of the credit this tax year, you can buy a qualifying item and claim the credit or any remaining credit in 2010. It would be nice if the credit would be unlimited, but we are still a few steps away from living in paradise. There is one important deadline to remember: The items have to be installed by Dec. 31, 2010, for taxpayers to claim the credit. No excuses will be accepted. And again, you need to be careful: some windows may be energy efficient. However, the building code can overwrite the use of those windows. For example, in Miami Dade County windows need to be impact resistant, too. There are products out that qualify as impact resistant and energy efficient. Ask an expert or the county before you go on a shopping spree.
For some homeowners solar energy systems are "hot" items. You can get a 30 % tax credit for solar systems as well, and one good thing is that they are separate from the credit for air conditioners, doors and windows. A homeowner can actually use both credits. What does the credit include? Solar energy systems such as water and pool heaters, small wind systems, geothermal heat pumps and photovoltaic systems. Deadline is December 31, 2016.
And there’s no cap on the amount of the credit. If you spent about $50,000 to install solar panels and a battery back-up system for your home, you might get about $20,000 from the state solar energy rebate program, and will receive a further $10,000 as a credit on your taxes. That puts the final price tag for your system at around $24,000. And after completion you will see nice monthly savings on your electricity bill as well.
Some of the deductions and credits might be harder to come by than others. The state is expecting at least $17.5 million in federal dollars it can issue in the form of rebates to buyers of the right kinds of dishwashers, washing machines, refrigerators, dryers, air conditioners and other items. Nevertheless, the Feds have to approve Florida’s list of appliances, and that might not happen until later this year. Think carefully before you run out and buy a new dishwasher right away, you might end up paying the whole thing out of your own pocket.
Jan Heitmann
[Source: RISmedia]