• Skip to main content
  • Skip to secondary menu
  • Skip to primary sidebar
  • Skip to footer

Homestructions

Keep your home running with simple and smart tips.

MENUMENU
  • Random generators
    • Dice Roller
    • Flip a Coin
    • Random Color Generator
    • Yes or No
    • Yes or No Wheel
    • Random Number Generator
    • Random String Generator
    • Password Generator
    • List Randomizer
    • Ask the 8-Ball
  • Categories
Home / General / Energy efficient home renovations can reduce taxes & save money
Energy efficient home renovations can reduce taxes & save money

Energy efficient home renovations can reduce taxes & save money

General

Energy Efficient Home Renovations Save Money and Reduce Taxes

There are many reasons to update your home. Whether there has been damage from fire, weather, or flood, the interior has become outdated or you would like to improve energy efficiency, you may also find that there are financial incentives to making updates. Energy efficient home renovations can reduce taxes & save money. While renovations are expensive and time-consuming, the results can be very gratifying. You will enjoy the subsequent savings to your monthly budget that energy efficient systems and appliances provide, but you may also benefit from some nice tax breaks.

Federal Tax Benefits for Home Improvements

Federal taxpayers who make changes to their existing primary residence can deduct 30% of the cost of improvements (up to $1500) on their annual taxes. Eligible improvements include new insulation, roofs (metal and asphalt), windows and doors (garage, storm and sliding glass), HVAC (furnaces and boilers, air source heat pumps and central air conditioners), water heaters (oil and propane, electric and gas), and Biomass stoves.

Adding renewable energy systems can also qualify you for tax credits. These deductions are available at 30% of the cost of the new system with no cap, so if you spend $15,000 you can deduct $4,500 from your taxes. These credits apply to the installation of solar panels, solar water heaters, geothermal heat pumps, small wind energy systems and fuel cells (although there is a $500 per .5 kW limit for fuel cells).

State and Local Tax Incentives and Rebates for Household Renovations

In addition to the available federal deductions many states and cities also provide incentives for upgrades. In San Diego, for example, homeowners may be eligible for rebates when they replace a washer, refrigerator, air conditioner, furnace, water heater, or insulation with more efficient EnergyStar rated appliances or systems. In Philadelphia, homeowners can collect rebates of up to $2000 for solar thermal water or space heating systems and solar panels and $2.25/W for solar panels in addition to the federal renewable energy tax credit. Pennsylvania also gives rebates for wind turbines, fuel cells, and geothermal heat pumps. Some states even give tax credits for adding sprinklers and irrigation systems that will conserve water.

See also  Prepping your home for holiday visitors

To determine the tax credits and incentives available in your state, you should check the Database for State Incentives for Renewables & Efficiency.

Limits on Energy Efficient Upgrade Benefits

Before you begin renovations, be sure to do your homework. Not all improvements qualify for reimbursements. Some components like gutters for a new roof, new air conditioning and heating ducts, and even some nuts and bolts aren’t covered. Installation costs are typically excluded as well.

Many products carry the EnergyStar label that includes an energy efficiency rating, but that doesn’t guarantee that they qualify for the 30% tax credit. Ineligible appliances and systems include:

  • Ceiling fans
  • Clothes washers & dryers
  • Compact Fluorescent Light Bulbs (CFLs)
  • Dehumidifiers
  • Dishwashers
  • Electric furnaces or boilers
  • Electric storage tank water heaters
  • Electric tankless water heaters
  • Evaporative coolers (swamp coolers)
  • Fans
  • Lighting (light fixtures or energy efficient lamps such as LEDs)
  • Ovens and ranges
  • Power factor correction devices
  • Programmable thermostats
  • Refrigerators
  • Roof coatings
  • Room air conditioners
  • TVs
  • Toilets
  • Window treatments

Despite that extensive list of excluded energy efficient items, using them will likely save you money on your monthly energy costs and water bills, and you even may qualify for the Cash for Appliances program.

Newer systems and appliances run more quietly, have more convenience features, and are easier to maintain. If it is time to make a change, first do your research and then enjoy the benefits.

You may also like…

  • Instant hot/cold water dispensers save time and moneyInstant hot/cold water dispensers save time and money
  • Make delicious, affordable meals with your slow cookerMake delicious, affordable meals with your slow cooker
  • When To Replace Your Refrigerator Water FilterWhen To Replace Your Refrigerator Water Filter
  • How to recalibrate your ovenHow to recalibrate your oven

Primary Sidebar

Search

Homestructions apps

  • Dice Roller
  • Flip a Coin
  • Random Color Generator
  • Yes or No
  • Yes or No Wheel
  • Random Number Generator
  • Random String Generator
  • Password Generator
  • List Randomizer
  • Ask the 8-Ball

Categories

  • Air Conditioners & Fans
  • Air Filters
  • Appliances
  • Central Vacuums
  • Circuit Breakers & Load Centers
  • Cleaning & Organization
  • Cooktops, Ranges & Ovens
  • Dimmers & Switches
  • Dishwashers
  • DIY
  • Drainage & Irrigation
  • Electric
  • Electric Garage Doors & Openers
  • Energy Matters
  • Extension Cords & Surge Protectors
  • Faucets & Sinks
  • Filtration & Softeners
  • Fireplaces & Stoves
  • Garbage Disposals
  • General
  • Heaters & Furnaces
  • Heating & Cooling
  • Home Improvement
  • Home Repair
  • Insulation
  • Lawn & Garden
  • Leaks & Water Damage
  • Light Bulbs
  • Microwaves & Toaster Ovens
  • Money-Saving Tips & Tricks
  • Organization
  • Outdoor Heating
  • Outlets & Adapters
  • Plumbing
  • Pool Care
  • Pumps & Tanks
  • Refrigerators, Freezers & Ice Makers
  • Remodeling
  • Small Appliances
  • Smoke, Carbon Monoxide, & Radon Detectors
  • Thermostats
  • Time Savings
  • Tools & Hardware
  • Uncategorized
  • Valves & Valve Repair
  • Washers & Dryers
  • Washing Machines
  • Water Dispensers
  • Water Heaters
  • Wiring & Cables
  • Random generators

Footer

  • About Homestructions
  • Ask the Expert
  • Contact Us
  • Site map

Copyright © 2023 Homestructions.com · All Rights Reserved