Shifting Solutions

The awards for switching to alternative and renewable energy sources are very generous.

The financial benefits for changing to renewable energy systems, have become really rather generous. Congress recently did away with the caps on 30 percent tax credits for homeowners who install solar panels, geothermal heat pumps, or windmills. Now a $24,000 investment to make a home solar-powered would generate a federal tax credit worth $7,200. (Before the stimulus, credits were capped at $2,000 for geothermal and solar; $4,000 for wind).

Now affordability ballgame has changed because of these tax code revisions says Craig Perkins, executive director of the Energy Coalition, a nonprofit in Irvine, Calif., that helps consumers become more energy-efficient. He has estimated that more than 1 in 4 Californians can now borrow the funds necessary to install solar panels and be paying less out-of-pocket per month immediately (including payments on solar panels) rather than keep keep getting power from their regular utility company . Yet others, he says, will often recoup the costs of adding solar or high-efficiency air conditioning over a few years.

One of the keys to make the most of savings, Perkins says, is to choose the projects that qualify for a rebate from one’s state or utility and are also eligible for a federal tax credit. The type of “piggybacking” is allowed and encouraged. The challenge, however is to get consumers to research their options and to take the necessary actions to make this happen.

“The problem we find constantly is that [navigating incentives] can be extremely confusing,” Mr. Perkins says. “People don’t want to become wonks about what’s eligible and what isn’t…. It’s the nuts and bolts of making it happen that really stops a lot people.”

Merchandisers have begun to educate consumers about new tax benefits. At Home & Hearth, a heating stove dealer in Hampton Falls, N.H., manager Bob King was talking up tax credits with every customer hours after Congress passed the stimulus bill. With brochure in his hand, Jim Marshall of Exeter, N.H., liked hearing from Mr. King in the store’s parking lot that a new wood pellet stove would qualify. He’d like to make a switch and stop spending more than $300 per month for oil heat.

Crude oil prices have climbed approximately from $33.00 a barrel to over $ 60.00 a barrel, in spite of the slowing worldwide energy demands and the economic recession. One can only imagine what the world energy prices would be like once the economy has broken loose and folks start working again.

We need to learn how to cushion ourselves from further energy price spikes and likely supply disruptions, now that we are aware just what can happen to our dependence on foreign and even local supplies of oil and energy. No nis the perfect time to make those changes in your home and start or complete those projects that would help you become less reliant on your utility company as well as reduce your part in the ever expanding carbon footprint we all seem to contribute to.

Home solar power systems or even home wind power are some things you can do decrease your energy dependence and increase your financial benefits. If you build and install one or other of the systems above yourself the whole project will even be that much more profitable.

As demand rises for alternative energy resources, and subsequent costs decreases have helped make the economics of owning your own system even more valuable. If you live in the United States , you can now take advantage of the the many grants and tax credits our government is offering those who participate in any of their ” economic recovery” programs..

Making you aware of the resources available to you, a home owner, when it comes to repairs or modifications.

If your thinking of adding on, repairing or replacing anything on your home the next two years, consider doing so, with the federal incentives available on certain features. Check before you plan, then plan around the utilization of a lot of free money and rebates that are available to you as a home owner.

Consider just the following alone….

1. A federal tax credit up to $1500 for 30% of the cost of adding insulation, installing new windows, caulking cracks, and other expenditures for “tightening up” your house to conserve energy. This credit applies to investments you make by 12-31-2010.
2. A similar credit and deadline for investing in more efficient heating, air conditioning, and ventilation systems for your home.
3. A federal tax credit with no cap for 30% of costs incurred by 12-31-2016 for investments in renewable energy systems for your home, including solar thermal, solar electric, wind power and biomass fuel systems.
4. A federal tax credit for purchasing diesel, hybrid and electric cars.

Since laws and tax regulations are subject to change, you should consult with your tax advisor before claiming energy tax credits, the above is a short summary of the credits available as of May 2009:

Increasingly positive signs that the economics of home renewable energy systems are improving. As the initial investment costs decrease and energy costs rise and, if you live in the United States, you can take advantage of renewable energy tax credits which our government restored and expanded in the “economic recovery” legislation passed in 2009.

Want to increase your energy independence and save money in the process? If your at all handy, you can, by building your own solar and wind power generator system . Just follow the link.

Today’s costs for an average home solar system, could still take more than six years to recoup.

According to the Energy Efficiency and Renewable Energy division of the U.S. Department of Energy, $30,000, or even $5,400, after all rebates, which may seem like a high cost to you, is still less than 1% of what it did cost in the 1970s.

According to Broadpoint.AmTech, a technology research firm, today’s costs for an average home solar system, could still take more than six years to recoup.

Assuming an average cost of $28,000 to equip a home with home solar energy and an estimated tax rebate of $10,000. And also assume you’re paying 17 cents per kilowatt hour for conventional electricity, which you’ll still need to pay for from time to time and add in approximately six full hours of sunshine a day (this may vary depending on your location), it would take about six and a half years for your investment to pay off. If you change the price of electricity to 11 cents per kilowatt hour, it’ll take almost 10 years based on Broadpoint’s equation.

However, If you can afford to and have that kind of cash on hand, using home solar panels could actually make potential future electricity price increases less of a concern.

Consider this though, if your at all handy around the home, buying a $49.95 How to Make soilar Panels Kit which shows you precisely with easy to follow videos and complete instructions on how to build a system for yourself and all for under $200.00! It even shows you where to find the materials. This option would elimate most of the six year wait for the return on your investment and you could start saving money in the same year!

Note that savings can vary

The location of your home energy system has a lot to do with how much you actually save in electricity, and how energy efficient your home is and what other features you have improving your home’s energy efficiency.

The more energy efficient building you have, the better your renewable energy system will work, so before you install your system, adding insulation, energy efficient lighting, appliances and windows will go far to reduce your home’s electricity use

Net Measuring a Local Benefit
Some utility companies use net metering, a measurement system, which may add to your savings.

As an example, in Hawaii and New York, where retail electric rates are high, this is very beneficial, and utility companies also benefit as the solar energy you’d provide would likely come during periods of peak demand for electricity, during the day.

I Hope this has been helpful, and good luck on your decision!

Returns that can be gained over time

Are you aware that Installing home solar panels, or photovoltaic cells on your home , is a terrific way to reduce harmful pollution and reduce your electric bills, but only if you have the money to spend upfront.

An average family of four, residing in a single family home, can budget for an investment of about $30,000. Of course that’s if you hire the whole job out to a solar company.

Like any investment, there are returns that can be gained over time. In this case they include tax rebates in addition to future savings on utility bills.

But before you find an installer and start making plans for the money you’ll save by going solar, you may want to consider how long it will take for this investment to pay off against your initial costs using a traditional solar firm.

Once you do, you may just want to build them yourself, if your just a little bit handy around the house, there are home solar energy kits available with easy to follow instructions that guides you through the entire process including showing you where to find the materials to build the whole system for under $200.00!

Start by checking the tax incentives
To encourage home owners to use home solar energy and other renewable sources of power, the IRS offers an energy tax credit in 2009 for 30% of the cost of qualified alternative energy equipment. Also each state has their own form of state income tax credits for the same purpose, a sales tax exemption on your purchase and a property tax exemption.

IN New York state, as an example and assuming a $32,000 initial cost, a 30% federal rebate, a maximum state rebate of $5,000 and a $12,000 rebate through the New York State Energy Research and Development Authority, the overall cost is just $5,400, notes Scott Rakowski, New York State regional manager at Alteris Renewable.

So If your not handy around the house and you find that to build your own solar panels intimidates you, then the $ 5,400. net price tag seems mighty good!

Check out what the incentives are in your state for installing solar cells in your home, go to the Database of State Incentives for Renewables & Efficiency at DSIREUSA.org.

Tune in next week and we will crunch some numbers!