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Tax Credits & Rebates

What if you could make home improvements that increase your comfort, lower your energy costs, add value to your home, and do something good for the environment? And what if you could get some money back from Uncle Sam at the same time?

We can show you how…

Updated Tax Incentives for Homeowners

Part of the tax extender bill passed by Congress in December 2010 made significant changes to tax incentives for federal taxpayers who install qualified energy efficient retrofits in their home, including higher efficiency heating, ventilation, and air conditioning (HVAC) equipment in their primary residences. An eligible taxpayer may claim up to $500 in tax credits, subject to caps based on the type of equipment installed.

You may now qualify for tax credits equal to 10% of the costs (up to a $300 limit) for installing a high efficiency central air conditioner, heat pump, or hot water heater. You may also qualify for tax credits equal to 10% of the costs (up to $150 limit) for installing a qualified furnace or hot water boiler. A smaller tax credit of 10% of the installed costs (up to $50 limit) is available for installing a system with an advanced main air circulating fan.

But you have to hurry because these tax credits are only available for improvements made in 2011. Not taking advantage of this incentive just leaves money on the table.

Consider Geothermal

Any Nashville area homeowner that needs to purchase a new heating and cooling system should consider geothermal. What was once a fairly expensive investment is now being subsidized by the federal government to the tune of a 30% income tax credit. Why does the government want you to install a geothermal heating and cooling system? It is because geothermal is one of the best available technologies for reducing the country’s energy consumption and for reducing carbon emissions to the atmosphere. Today, residential and commercial buildings are responsible for consuming about 39% of the country’s total energy use and for about 43% of total carbon emissions. In a typical residence, between 55% and 70% of all energy used is for heating, cooling, and hot water. Geothermal heat pumps use the solar energy absorbed by the earth to deliver up to 5 kilowatts of heat for every kilowatt of electricity they use. They are so efficient that installing them in a residence can cut the total energy used by more than half. This results in such substantial savings to the homeowner that, thanks to the tax credit, a geothermal installation will generally pay for itself in 5 years. Since the equipment has an expected life span of 20 to 25 years, the total energy savings to the homeowner is quite impressive. So if you are a homeowner who thinks there was nothing in the stimulus package for you, it might be time to change your mind. Install geothermal and help the country, help the planet, and help your pocketbook!

What Is Considered a High Efficiency Unit?

A split system central air conditioner must meet or exceed 16 SEER and 13 EER; package system central air conditioners must meet or exceed 14 SEER and 12 EER.

An air source heat pump must meet or exceed 15 SEER and 12.5 EER and 8.5 HSPF, in order to qualify for the tax credit. Package heat pump systems must meet or exceed 14 SEER and 12 SEER and 8 HSP.

Natural gas furnaces, propane furnaces, natural gas hot water boilers, propane hot water boilers, oil furnaces, and oil hot water boilers all must meet or exceed 95% AFUE.

For the advanced main air circulating fan credit, the fan must use no more than 2% of the furnace’s total energy. If the fan is qualified, but the furnace is not, you will not be able to take 10% off the cost of the entire furnace. Ask your HVAC contractor to break out the cost of the fan in your bill. You can get a 10% tax credit on the cost of the fan alone. If the furnace is qualified, but the fan is not, you can still take the 10% tax credit on the full cost of the furnace.

If I claimed more than $500 in tax credits under the previous tax credit programs, am I still eligible?

No. The new law reinstates the lifetime tax credit limits, which disqualify any homeowner who has claimed more than $500 in 25c tax credits since January 1, 2005, from any further credits.

Why You Should Consider an Upgrade

Advances in technology over the last ten years mean that today’s higher efficiency HVAC equipment uses less energy, runs more quietly, and provides improved indoor air quality and comfort. And by using less energy and improved refrigerants, your new HVAC equipment is better for the environment.

Most homeowners would like to reduce their energy bills with higher efficiency HVAC equipment, and these tax credit help make the initial investment more affordable.

Talk to CES contractor about finding the right qualified equipment that meets your budget. They can show you how much energy (and money) you could save over the long term.

Note: Every taxpayer’s situation is different. We can’t guarantee eligibility for the tax credits. CES can help you figure out what equipment qualifies and how it can work for your comfort, health, and pocketbook.