Extra credit for energy savings

By Carrie Madren

06/23/2009

As stimulus money from the American Recovery and Reinvestment Act rolls out into state coffers, this is an ideal time to take advantage of green incentives offered to individuals around the Chesapeake watershed.

New and bigger tax credits, grants and other financial incentives may allow you to install alternative energy and conservation measures at a much lower cost.

Home-improvers would do well to buy Energy Star rated products, which will earn them refunded money next tax season. Federal tax credits for energy efficiency include up to a 30 percent refund on approved Energy Star windows, doors, furnaces and air conditioners. Certain Energy Star-qualified metal and reflective asphalt shingles also earn a 30 percent tax credit (all with a limit of $1,500 per household), as do Energy Star water heaters, biomass stoves, geo-thermal heat pumps and more.

Residents who buy solar hot water heaters or power-supplying photovoltaic systems can apply for a tax credit on their federal income tax for 30 percent of the cost with no maximum. Energy Star geothermal heat pumps, too, earn a 30 percent federal income tax credit.

From there, look to state governments for more savings. The U.S. Department of Energy's State Energy Program provides funding to state energy offices for energy efficiency and renewable energy programs. Maryland's slice of the pie is $52 million, Virginia $70 million and Pennsylvania nearly $100 million.

States incentive programs offer money back on top of what the federal incentives offer, so you can combine incentives for added value.

In Maryland, the Bio-Heating Oil Tax Credit Program offers a credit of 3 cents per gallon up to $500; Geothermal Heat Pump Grants reimburse you up to $10,000 to install qualified geothermal heat pumps in homes and businesses; solar grants provide funding up to $10,000. Grants for small windmills offer $2,500 per kilowatt capacity, $10,000 maximum. Another bonus for investing in energy efficiency and clean energy: buy a solar water heater, solar space heater, photovoltaic system, wind mill or geothermal heat pumps, and your purchase is sales tax-free.

In Maryland, too, those with qualifying septic systems can have a new nitrogen-busting septic installed on their property ? for free ? paid for by Maryland's Flush Tax, a $30-per-year surcharge on water bills.

In Virginia, individuals can claim income tax credit for installing photovoltaic, solar thermal and small wind systems. Depending on the size of the system, residents can get up to $8,000 for solar photovoltaic, up to $4,000 for solar thermal, and $6,000 for wind-power generators.

Pennsylvanians with combined incomes under $150,000 get financial relief for energy efficiency projects ? air sealing and insulation, appliances, programmable thermostats, ceiling fans, windows and more ? through Keystone Help. The rebate program offers up to $250 (10 percent of the cost of purchase and installation) of improvements that meet Energy Star standards and up to $500 for improvements that exceed Energy Star standards. (Apply online at www.keystonehelp.com.)

Solar incentives in Pennsylvania are offered through The PA Sunshine Solar Program, which reimburses consumers up to 35 percent of the purchase and installation costs of solar energy technology. For scope, photovoltaic panels added to a house cost upwards of $30,000.

In all states, low-income residents can apply for free weatherization services to seal up attics, windows and doors, add insulation where necessary and improve home heating and cooling systems. The Weatherization Assistance program's budget ballooned with stimulus money from the American Recovery and Reinvestment Act as part of President Barack Obama's goal to weatherize one million homes per year.

Under the Weatherization Assistance Program, 59 states and territories share slices of a $5 billion dollar pie. Maryland will receive $61 million, Virginia $94 million and Pennsylvania $252 million.

Some local jurisdictions and counties also offer their own small incentives. For example, Montgomery County, Maryland, will pay you pennies per kilowatt hour generated with a photovoltaic panel, or if you buy clean energy, you'll also earn a penny per kilowatt hour.

Finally, utilities offer incentives for customers to invest in electricity-saving tools. Virginia Natural Gas customers who buy high-efficiency natural gas equipment can claim rebates of $500 for an energy efficient furnace or tankless water heater, $150 for a tank water heater or get a free programmable thermostat. Baltimore Gas & Electric ? like many utilities around the Mid-Atlantic ? offer rebates for buying Energy Star appliances.

Virginians planning a big Energy Star purchase, however, may want to wait until Columbus Day weekend (October 9 to 12 in 2009). That's when certain Energy Star qualified products will be exempt from the sales tax. Exempt items, which must cost $2,500 or less per item, include dishwashers, clothes washers, air conditioners, ceiling fans, compact fluorescent light bulbs and refrigerators, plus WaterSense qualified products.

Find out more at the Database of State Incentives for Renewables & Efficiency: www.dsireusa.org .