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Improving Your Home's Energy Efficiency Can Save Money

Certain Improvements Qualify for New Federal Tax Credits

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Even though the economy is showing signs of improvement, most consumers are still looking for ways to save money. Making improvements to save energy around your home may cost some money now but produce savings now and in the long-term. This month we’ll look at various ways to improve the energy efficiency of your home, ranging from simple, low-cost strategies to more extensive improvements. Some improvements may qualify for tax credits and help you save even more.

Where Is Your Home Losing or Using Energy?

Where is air likely leaking out of (or into) your home? Is there adequate insulation in your attic or crawl space? Can you feel drafts around your doors or windows or see cracks of daylight? How old or efficient is your furnace or air-conditioning system? Making a home energy audit to answer these questions and more is the first step in planning the most effective improvements for your home. You can do a simple energy audit yourself using the energy audit instructions from the U.S. Department of Energy (DOE). Some utility companies also offer home energy audits for free or at low cost.

 

What About Energy Tax Credits or Rebates?

For existing homes, federal tax credits are available for specific home improvements made in 2009 or 2010, thanks to the American Recovery and Reinvestment Act of 2009 which extended and expanded some credits. Even if a home improvement doesn't qualify for the federal tax credit, other incentives such as rebates or tax credits may be available from your state or local tax authorities or utility companies. Check the Database of State Incentives for Renewables & Efficiency for other incentives you may be eligible for. We suggest that you check out these incentives after your home energy audit to help in planning what’s doable for you and your family budget.

Strategies to Reduce Energy Use in Your Home

From the simpler to the more involved, here are some ways to reduce energy use or loss in your home and thus save dollars.

Plug Air leaks and Gaps. Whether you live in a hot or cold climate, leaks around windows, doors, and other openings can make your heating & cooling systems work harder. Look for any cracks, gaps, holes, or other openings that could allow air to enter or escape from your home. Fill any gaps or holes around pipes and vents with spray foam caulking. Check the caulking and weatherstripping around windows and doors and repair or replace it where needed.

Strategies to reduce enegy usage in your home

  • Plug air leaks and gaps
  • Increase insulation as needed
  • Evaluate the need for more energy efficient windows & doors
  • Evaluate the efficiency of heating & cooling systems
  • Choose Energy Star appliances to replace old appliances

Increase Insulation as Needed. Adding insulation where needed can increase the energy efficiency of your home. Insulation functions to keep the outside hot/cold air out and the inside cold/hot air in. Check the amount of insulation in the attic. Also check the floors over any unheated space such as a basement or garage. Adding insulation where needed in these locations is usually something you can do yourself. The Energy Savers website provide steps for inspecting and evaluating the insulation. If you suspect that the insulation in the walls of an older home is inadequate or it’s difficult for you to access the attic or crawl space, you may wish to consult a licensed insulation professional. Also, new insulation may qualify for a tax credit (30% of cost up to $1500).

Evaluate the Need for More Energy Efficient Windows & Doors. It's the time of year to prepare for cold weather. Before you install elderly storm windows and doors, consider replacing your windows, doors and skylights with Energy Star rated products. If that's beyond the budget, consider replacing the storm windows and doors with new Energy Star rated products.

When evaluating new windows, doors, and skylights, look for two performance characteristics—the U-factor and SHGC (solar heat gain coefficient). The lower the U-factor, the more energy efficient the window, door, or skylight. A low SHGC rating indicates that the product is more effective at blocking solar heat gain. A high SHGC rating indicates that the product is more effective at collecting solar heat gain. Thus, determining what SHGC is appropriate for a window, door, or skylight, depends on the climate, orientation (north, south, east, west), and the amount of shade it receives.

To receive the federal tax credit (30% of the cost up to $1500), the windows, doors, and skylights must have a U-factor and SHGC of <= 0.30. Note that not all Energy Star labeled windows, doors, and skylights qualify for the tax credit. Storm doors and windows must, in combination with the window or door that its installed over, have a U-factor and SHGC of <= 0.30 and meet the International Energy Conservation Code (IECC).

If window and door replacements or improvements are not feasible, don’t forget simple ways to save energy in winter. Interior clear film window covers cut down energy loss for older windows without thermal glass and don’t interfere with clear views out the window. Closing draperies or window covers during cooler nights and opening those on sunny windows during the day can save heat loss. (For warm weather, close the draperies during the day on sunny windows.)

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Evaluate the Efficiency of Heating & Cooling Systems. Because heating and cooling your home can account for as much as 50% of your energy use, improving the efficiency of these systems can make a difference in your energy bills. The home improvements discussed above can help improve the efficiency of your existing systems.

If you have older heating and/or cooling systems (typically 12 to 15 years), you may want to consider replacing them with Energy Star rated units. For the 2009 and 2010 tax years, if you buy certain Energy Star systems, you can qualify for a tax credit of 30% of the cost up to $1500. The Energy Savers website describes the types of units that qualify.

If replacing your unit is beyond your current budget, you can still save on your energy bills.

  • Have your unit serviced prior to the season and change filters regularly to help the unit run more efficiently.
  • In winter, each degree you lower your thermostat may save about 3% of your heating bill.
  • Replace your thermostat with a programmable one. Use it to lower the temperature while you are asleep or out of the house and to raise it just before you awake or get home. According to the Energy Savers site, turning your thermostat back 10 to 15 degrees for 8 hours can save anywhere from 5 – 15% a year on your heating bill.
  • Use your ceiling fan in both summer and winter. Remember that warm air rises, so running the ceiling fan on low in winter, will send warm air back toward the floor. For summer, running the ceiling fans in reverse can help circulate cool air (that stays low) to upper areas.

Choose Energy Star Appliances to Replace Old Appliances. Older appliances tend to be less energy efficient than new ones. Replacing your older appliances – refrigerator, dishwasher, washing machine, water heater – with Energy Star rated can save money and energy. The American Recovery and Reinvestment Act of 2009, provided funding for rebates for the purchase of Energy Star-qualified appliances. These programs are being implemented by each state and the Energy Star appliances eligible for the rebate will vary from state to state. Texas’ program includes refrigerators, freezers, clothes washers, dishwashers, room air conditioners, gas condensing water heaters, gas storage water heaters, gas tankless water heaters, electric heat pump water heaters, solar water heaters, central air conditioners, and air source heat pumps and is tentatively scheduled to begin in April 2010. Check out this page on the Energy Savers website for information about the programs in other states. Consider this option when an appliance fails or perhaps it’s just time for some updates.

If you aren't ready to replace one or more appliances, make sure they are operating efficiently by keeping them and the area around them clean. For example, pull out your refrigerator and clean the back and underneath it; don’t miss cleaning the coils. When you put it back in place, ensure that it has the proper clearance from walls and cabinets.

Enjoy Savings Starting This Winter

Making just a few of these improvements to your home’s energy efficiency can help you begin to save right away. The Department of Energy has estimated that most homeowners could save up to 40% on their annual energy bills by making the kinds of improvements discussed in this report. Here’s to a more comfortable winter and a fatter wallet.

For more information

Energy-Efficiency Home and Vehicle Tax Credits from the Alliance to Save Energy

Database of State Incentives for Renewables & Efficiency provides information on state, local, utility, and federal incentives and policies that promote renewable energy and energy efficiency.

Cut your energy bills: You can save $1,500 with these 4 strategies from Consumer Reports

Energy Savers: Save Energy and Money at Home from the U.S. Dept. of Energy

Energy Tax Credits podcast from the IRS

Energy Incentives for Individuals in the American Recovery and Reinvestment Act from the IRS


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