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Doing audits…

The realist is getting a dose of reality in home energy audits and the follow-up remediation work.  A side effect is the slow pace of updates in here.

On the audit side there is a lot of fun and learning, but no great surprises; the houses leak air, even by benign (or should that be malign?) US standards.  A lot of clients are choosing not to go ahead with energy savings improvements because they feel the level of incentives is simply too low to justify the expense.

So what is likely to happen to incentives?  I would greatly appreciate a crystal ball.  The federal Home Star legislation may or may not make it to a vote by the senate, and may or may not pass if gets to a vote.  My bet?  No action until next year, sometime, maybe.  Of course it will be a great thing if I lose this bet.  For detail on the legislation go to the HOME STAR COALITION site.

The federal tax credit of $1500 is also set to end on December 31, 2010.  Absolutely no word on if this will be extended.  But then the new House majority has sworn not to impose any tax increases – so logically phasing out this credit will be strenuously opposed by them.  That is what logic, a rare commodity in the real world, tells me. The point is that the $1500 credit may cease.  SO;  if you the are still on the fence, get in now, while you are sure of getting that break.  See here for more details.

Can the energy efficiency tax credit be carried over to future years?

The tax credit for products at 30% up to $1,500 CAN NOT be carried over to future years. You can’t even carry forward tax credit dollars from 2009 to 2010. But you can take part of the $1,500 in 2009, and the rest in 2010 – if they are for separate purchases (ex: you spend $3,000 on windows in 2009 and get a $900 tax credit on your 2009 taxes, then spend $2000 on an air conditioner in 2010 and get a $600 tax credit on your 2010 taxes).

The tax credit for the following products at 30% with no upper limit CAN be carried forward to future years:

  • Geothermal Heat Pumps
  • Solar Panels
  • Solar Water Heater
  • Small Wind Energy Systems
  • Fuel Cells

The energy efficiency tax credit is technically “non-refundable” which means at the end of the year, you can’t get back more in credits than you paid to the government in taxes throughout the year. If you are unable to claim the entire 30% of your purchase for the above products in one year, you can carry forward the unclaimed portion to future years.”

Talking of more advanced alternative energy systems; some of our clients are interested in these approaches, but very few go ahead once they learn the costs.  Even a solar hot water system, which should be a no-brainer, costs some $6,500 to supply and install in the NE US climate, where it has to be a 2-stage system with antifreeze etc.  OK, so 30% comes off the top, and the break-even point is only a few years down the track, with significant savings after that.  But in this continuing economic uncertainty few are willing to take the next step.

The same argument goes for solar PV and ground-source heat pumps, except here the initial (gross!) cost is in the $60K+ range, and so interests even fewer – despite all the financial arguments of long-term gains.  And that of course is the heart of the matter; putting in a solar system, or a GSHP, is essentially a financial decision. These systems have nothing to do with saving energy, either by using less, or making the house more energy efficient.  But people who express an interest in solar or other alternative systems are also vitally concerned with making not just their house, but their whole lifestyle energy efficient.  More power (pun intended) to them!

The approximate prices quoted are from personal experience, and from sites such as the US Department of Energy “energy savers” pages, and the non-profit Energy Matters site (solar-estimate.org).

Which gets us back to government incentives.  Much as I like the idea of a feed-in tariff to subsidize the adoption of individual solar PV it can go wrong.  Having the feed-in, i.e. what the power company pays you for your generated electricity, equal to (or slightly higher than) what it costs you to buy it results in little action.  Having it too high causes other problems, as illustrated by this story from the state of New South Wales, in Australia.

OK – I’ve got to go polish my blower door…

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