Homeowners can take advantage of savings, install efficient upgrades

Homeowners don’t need to be in the housing market to take advantage of government incentives to stimulate the economy. They may be able to claim tax credits for making improvements to their current home.

The federal government is offering tax credits at 30 percent of the cost, up to $1,500, for home renovation projects that improve energy efficiency . Work must be done during 2009 or 2010, and the credits apply to the homeowner’s existing principal residence.

Eligible improvements include new windows and doors, insulation, roofs and air conditioning systems. Also covered at 30 percent of the cost — but without the $1,500 cap or 2010 deadline — are systems that use solar, geothermal or wind energy.

Previous energy efficiency tax credits were for 10 percent of the cost, up to $500. Former President George W. Bush raised the amounts to 30 percent and $1,500 for 2009 in last fall’s bailout bill, and President Barack Obama extended the tax credits to 2010 in this year’s stimulus package.

“Here’s where people can really make out: Air conditioners and heat pumps break,” said Philip Fairey, deputy director of the Florida Solar Energy Center in Cocoa. Replacing an old system with an energy-efficient version will save power costs in the future, and come with a credit the buyer can claim at tax time.

The offer is stimulating inquiries from consumers looking to replace or upgrade their systems.

“We get a ton of those,” said Heather Sacik, an employee at Able Air in Melbourne. A typical day might see 30 to 40 phone calls from consumers asking about making an improvement that would qualify for a credit or rebate. Some manufacturers are offering incentives that consumers can combine with the tax credit, she said.

Rising power costs are fueling interest in solar alternatives.

“The interest is definitely higher than I’ve seen for some time,” said Jacque Wirth, director of sales for Solar Energy Systems of Brevard, based in Melbourne.

The company’s solar hot water systems qualify for the 30 percent federal tax credit, as well as a $500 state rebate. The typical family can expect to pay $4,500 to $5,500 — before tax credits — to have a system installed, Wirth estimated.

Experts offer a caution: Requirements for the tax credit are specific and complex. Consumers need to be sure they’re following the rules and savings for the correct paperwork.

For example, windows must meet certain ratings for energy efficiency, and not all Energy Star-labeled doors and windows will make the grade.

“Everybody can say that they’re a green builder and they have energy efficient materials, but if it doesn’t make the solar reflectivity index, it does not qualify,” said Rockledge builder David Foley.

Customers and contractors also need to balance the homeowner’s needs and the performance of the materials against the amount of the credit, he said.

Fairey is a fan of metal roofs, which offer energy savings and durability. But windows are one area where buying a product that qualifies for the credit might be cost-prohibitive, and largely unnecessary.

The higher ratings are more important in northern climates, where the difference in temperature between the heated indoors and the frigid outdoors is much greater than the indoor-outdoor temperature differential in Florida.

A less-expensive window might be the smarter choice.

“It would actually do the job really well, but it wouldn’t qualify” for the tax credit, Fairey said.

He offers a simple way to get the most bang for the buck, even if no tax credit is involved: Replace your incandescent bulbs with compact fluorescents.

“You get all the bang in the world from those bulbs,” he said.