Huge energy efficiency tax incentives set to expire
Posted August 23, 2010 5:12 p.m. EDT
Time is running out for homeowners to benefit from $1500 tax credits for new HVAC and insulation.
Back in September of last year, I posted about the huge tax credits and other incentives available to homeowners who wanted to go green. There had, I argued, never been a better time to invest in lower energy bills and a more comfortable home.
Yet despite the huge boost these measures have given – to the environment, to the jobs market, and to the pocketbooks of working families – some of the most popular tax credits look set to expire at the end of the year. Homeowners who don’t act before Dec. 31 will miss out on as much as $1500 towards major home improvements that will save them money in the long run. That is unless, of course, we can persuade the government to extend its commitment.
Raising our voice for jobs, and the planet
All is not lost, however. Pressure is mounting from all ends of the political spectrum for our government to continue to take a lead on clean energy and efficiency measures. I recently took part in a delegation to Washington, D.C., meeting with senators to urge them to support Home Star – a measure that, if passed, would provide direct consumer incentives for residential efficiency retrofits for the next two years. The Home Star Coalition is now calling on the public to do the same, demanding action from their senators on this vital issue for our economy, and the planet. (Visit the Efficiency First homepage to find out what you can do!)
Not all incentives are created equal
Many experts agree that before you spend money on generating clean electricity, or heat, in the form of solar, it seems only wise to make sure that your use of energy is as efficient as it can possible be. Yet while solar and wind will rightly continue to enjoy generous tax credits through till 2016, the incentives for HVAC, insulation, windows and other efficiency-focused solutions do not have the same longevity.
Survival of the fittest only goes so far
But why do we need subsidies? Many Americans – myself included – are naturally skeptical about the idea of government-supported industry. Why not let every industry stand on its own two feet, and let the strongest survive? Yet from aviation to cars to the Internet, many of the major innovations that have changed our lives for the better – and generated thriving private enterprise – enjoyed early government support and encouragement. (Some still receive that support today.)
Add to that the fact that energy efficiency and renewables are up against one of the most subsidized industries there is – fossil fuels – and you start to understand why these measures are needed. Whether it is direct government support of oil, gas and coal exploration, or whether it’s “hidden” subsidies that we all pay the price for in the form of unchecked pollution – the old, dirty way of generating energy has been shown to enjoy many times the subsidies afforded to clean tech worldwide. Incentives like the energy efficiency tax credits go only a small way toward redressing that balance.
America must lead. It’s what we do best.
Whatever your views on subsidies, it’s hard to argue with the idea of energy independence. After all, why send our money abroad – often to hostile regimes – if we can meet our energy needs at home? However, we can’t drill our way to independence – or put up enough solar and wind to magically power our economy. In order to have any hope of achieving energy independence, we must first learn to use our energy more wisely.
It’s a lesson that other countries are taking onboard in a big way. Whether it’s the UK government announcing “energy labeling” for all home sales, Germany supporting the growth of renewables with generous feed-in tariffs, or the Chinese government launching a massive push for energy efficiency – governments worldwide are recognizing that the future lies in cleaner energy, used smartly. The window is closing for America to take a lead on this issue – once other economies have established their places as leaders, it will be almost impossible to claw our way back.
Act now to save big
Whatever happens in January, there is still time for homeowners looking to take advantage of these major incentives. In fact, anyone purchasing qualifying high-efficiency water heaters, furnaces, boilers, heat pumps, air conditioners, building insulation, windows, doors, or roofs before Dec. 31 can see as much as 30 percent ($1,500 maximum) of the cost of their system returned to them as a tax credit. This credit is over and above existing incentives and rebates being offered by utilities like Progress Energy or Duke – which in some cases can amount to an additional $300!
If you are looking to take advantage of these historic incentives while you still can, now is the time to get in touch with your contractor – but don’t rush in. It’s important to ensure that whoever you work with understands the incentives available to you – and also understands your home as a complete system. In some cases expensive work like the replacement of the HVAC, or installation of new windows, just will not make sense – even when there is government money available to support it.
Whatever you do, please consider raising your voice for a sensible, long-term strategy for an efficient, clean and sustainable U.S. economy. We’ll all benefit in the long run.