Could you use an extra $2400 a year? The United States Department of Energy estimates that with simple changes to their home's energy efficiency, the typical family can save 25% on utility bills. And the last time they looked at those numbers was in 2020, before most municipalities raised their rates.
Unfortunately, most U.S. homeowners experience drafty homes with rooms that are never the same temperature, along with noise pollution and stale, poor-quality indoor air.
It wasn't until the oil crisis of the 1970s that residential building energy codes became mandatory. So, many of the 130 million homes in our country suffer from poor thermal comfort and indoor air quality problems.
Cold and hot climate zones are the worst. You may see the inside of windows icing over during winter in cold climates. Or upper floors that never cool below 80 degrees Fahrenheit, making sleep challenging in hot environments.
With the recent passing of the Inflation Reduction Act, homeowners can now qualify for tax credits on energy-efficiency upgrades. But, knowing what makes sense to improve a home's performance can be daunting. So, here are some general tips and ideas to get you started.
Where Do I Start?
While the energy-related tax credits for homeowners cover multiple options, such as electric vehicles, appliances, solar energy, water heaters, and HVAC systems, it makes the most sense to spend money on items with the most impact.
You can get this information by getting a professional home energy assessment. The assessment will tell you exactly how much energy your home uses, where your home has problems, and what issues to fix first.
What Will the Energy Assessment Include?
Professional energy audits typically use equipment such as thermal imaging, blower door testing, surface thermometers, gas-leak detectors, and furnace efficiency meters.
With this equipment, the assessor can examine a home's systems. Then, provide a report that will tell you how to reduce your home's energy consumption and make it more comfortable and healthy. Items recommended most frequently:
- Complete air-sealing of the entire house to prevent drafts and air leaks
- Increase insulation to lessen heat loss and increase thermal comfort
- Seal and insulate HVAC ducts in unconditioned spaces
- Fix any areas of the house with moisture problems to help prevent mold
- Increase the energy efficiency of air conditioning and heaters
- Install fresh-air ventilation, ENERGY STAR appliances, LED lighting, smart thermostats, solar PV, and other items to help boost home performance
The suggestions are based on the quality, condition, and age of your home and its equipment. They will also recommend lifestyle changes that can help lower energy use.
Reports will typically include federal and state-level incentives available and projected costs of improvements as well.
What Tax Credits Are Available?
The energy assessment will cover more exact tax credits for your location, but here are the tax credits listed by ENERGY STAR for primary residences:
- Air source heat pumps: $300
- Central air conditioning: $300
- Natural gas, propane, or oil hot water boilers: $150
- Natural gas, propane, or oil fans: $150
- Water heaters (non-solar): $300
- Advanced central air circulating fan: $50
- Insulation: 10% of the cost, up to $500, and doesn't include installation
- Metal and asphalt roofs: 10% of the price, up to $500, and doesn't include installation
- Doors, windows, and skylights: 10% of the cost, up to $500 (windows $200 cap), and doesn't include installation
Note: Read complete details and requirements to ensure you qualify before purchasing equipment or materials.
While 10% tax credits may not sound remarkable, you must keep the big picture in mind. The rebates are a bonus for improvements that will make your home more valuable, comfortable, and healthier. And over the long run will pay for themselves in reduced costs.
Home Performance: What You Should Know
When it comes to home performance, there are some general concepts to remember.
Focus on the Thermal Envelope
When you make improvements to your home's thermal envelope, everything improves.
Your home's thermal envelope is the barrier that separates temperature-controlled indoor living spaces from the outdoors and non-climate-controlled spaces, like your garage and attic. The foundation, walls, roof, windows, and doors generally create that separation.
With a good thermal window, noise pollution goes down, it's more comfortable, and your home requires less energy to maintain a comfortable environment.
In some cases, improving it also means a positive return on investment. A Remodeling Magazine report found that adding attic insulation costs around $1,268. But, it increased home value by 166%.
Focusing on the thermal envelope first also lowers additional costs by reducing the size of future improvements, such as the HVAC equipment or adding a solar array.
Prevent Stack Effect
The stack effect happens because hot air is less dense than cool air. As a result, the warm air rises and leaks out the top of the home. Cooler air enters the bottom of the house to equalize pressure.
In the early days of skyscrapers, the stack effect created significant problems. People couldn't open the front doors because of all the cool air rushing in at high pressure. That is why they started adding revolving doors.
While most homes are not skyscrapers, the stack effect can still lead to significant air leakage and energy loss.
You prevent this problem by focusing on air-sealing the top and bottom of your house. Typically, this involves the attic floor and rim joist areas.
By starting with the thermal envelope, and air sealing and insulating the top and bottom of your house, you're building the perfect foundation for future improvements. Then you can use the remaining tax credits the Inflation Reduction Act includes to much greater benefit.
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This article was produced by Nature of Home and syndicated by Wealth of Geeks.
source https://wealthofgeeks.com/residential-energy-credit/
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