For simple weatherizing - insulation, weather stripping, windows - the tax credits apply to 30% of the cost of materials, not the labor. (Photo courtesy of the National Renewable Energy Laboratory)
Tax credits for making your home
more energy efficient got a lot
of early buzz. The promise of up
to 1500-dollars back for insulation
and windows or efficient furnaces
led to a flurry of advertising.
Tamara Keith looks
into what might be stopping people
from taking advantage of the tax
credits:
Transcript
Tax credits for making your home
more energy efficient got a lot
of early buzz. The promise of up
to 1500-dollars back for insulation
and windows or efficient furnaces
led to a flurry of advertising.
Tamara Keith looks
into what might be stopping people
from taking advantage of the tax
credits:
My husband and I recently bought an older house that could no doubt use
some weatherizing. So, I called up Reuven Walder at EcoBeco.
(sound of door opening, people saying hello)
He’s a home energy auditor. He identifies ways to make a home more
efficient.
“I joke around, I consider myself an energy efficiency social worker.”
And he’s been getting a lot of calls lately from people like me – looking
to take advantage of the tax credits.
“Let’s look around the house and you can point out some things that are
of concern to you.”
Walder has all these cool tools, like an infrared camera that can see where
the insulation isn’t doing its job. He finds plenty of trouble spots,
including one in the attic.
“And if you put your hand in this little pocket here you can feel nice
cool air.”
That’s not supposed to happen.
“I’ll be honest with you. When I find these kinds of things, it makes my
day, because we get to fix them.”
Well, not all the time. Walder says only about a third of the homeowners he
works with actually follow through on his recommendations.
“I have talked to numerous homeowners and their primary reason for not
doing it is money.”
He says the tax credits are a great shot in the arm, but, for many people,
it’s just not enough. Part of the problem is, for simple weatherizing –
insulation, weather stripping, windows – the tax credits apply to 30% of
the cost of materials, not the labor. And labor is actually the most
expensive part.
“Our economy is just so slow right now that people are just hesitant to
spend any amount of money because, regardless of the incentive, they’re
still going to have to spend a lot of money to make the improvement. It’s
not going to cover a significant portion of the cost.”
At this point, federal officials don’t know how many people have been
inspired by the stimulus package to do work on their homes. They won’t know
until everyone files their taxes in April.
“It’s definitely driving additional business.”
Matt Golden is president of Efficiency First – the national association for
the home performance retrofitting industry. But he isn’t totally sold on
the way the stimulus package is distributing the tax credits.
“The biggest incentives are for the most expensive fanciest equipment and
as you move towards the most cost effective stuff, you get much smaller,
incremental incentives.”
So, there’s big money for solar panels and geothermal heating systems. And
if you want to put in a tank-less hot water heater or a super efficient
furnace, here labor costs can be counted towards tax credits. Golden says
the smallest credits go to insulation and other simple steps.
“It’s actually kind of an impediment to the type of retrofitting projects
that have the biggest return on investment, bang for the buck and create
the most jobs.”
In my house, Walder estimates we need almost $6,000 worth of work. But,
because not all of it qualifies, I’ll only get $600 of it back from the
government – but we won’t see the money until tax season.
I’ll admit – it’s a lot more money with a lot less of a tax benefit than I
was expecting, and that’s probably what’s giving some homeowners pause.
For The Environment Report, I’m Tamara Keith.