Tax credit for home energy upgrades gets reduced Credits are extended into 2011, but aren’t as much of an incentive

By Amy Hoak, MarketWatch

CHICAGO (MarketWatch) — Forget holiday door-buster sales. For big savings, some homeowners are actually buying themselves new doors for Christmas this year, in time to claim the government’s tax credit for home energy efficiency on their income taxes.

The credit covers energy-efficient doors and windows, insulation, roofs, water heaters, biomass stoves, and heating and air-conditioning systems. And the savings can be big: It covers 30% of the cost of improvements, and taxpayers can get a credit of up to a total $1,500 for all qualifying improvements they’ve made to their principal residences during 2009 and 2010.
Billionaire's holiday gift to neighbors

Holiday light show at the home of hedge fund billionaire Paul Tudor Jones II in Greenwich, Conn.

The credit expires on Dec. 31. But buried in the legislation that extends tax cuts made while President Bush was in office is also an extension of the home-energy tax credit.

The catch: Next year, that tax credit will be reduced significantly. Read more on what the new tax bill means to you.
Not so generous

In the bill, homeowners can claim only up to $500, said John W. Roth, senior tax analyst for CCH, a Riverwoods, Ill., tax publisher. It’s also a lifetime tax credit, meaning that if you’ve claimed the maximum of $500 in past years for home-efficiency upgrades — beginning after Dec. 31, 2005 — you can’t do it again.

Under the new rules, there are also limits for individual projects. For example, homeowners can receive a maximum of only $200 for replacing their windows and $150 for replacing a furnace, Roth said.

That’s why homeowners who have the means and the time to take advantage of the credit that expires at the end of this year might want to get their projects done now.

Because while it still may be possible to get a credit for work done next year, it won’t be nearly as attractive and might not even be much of an incentive: “If you haven’t taken advantage of this credit, I think you’ve lost a real opportunity,” Roth said.
Crunch time

Some homeowners, operating under the assumption that the tax credits wouldn’t get renewed, have been hustling over the past several weeks to get their projects finished on time.

To qualify for the credit in the 2010 tax year, not only do items need to be purchased, but they also have to be put into use by the deadline, said Rial Moulton, a certified financial planner and co-founder of Retirement & Tax Planning Specialists in Spokane, Wash.

The government “didn’t want people to buy this stuff and have it sitting around,” Moulton said. The purpose of the credit is to make homes more energy efficient, and allowing people to buy items and store them in the garage for a couple years until they got around to installing them would defeat that goal, he says.

While the specification isn’t a big issue for do-it-yourself projects, it can throw a wrench into homeowners’ plans when they need a professional for installation. So at crunch time, part of good comparison shopping on these items involves not only price, but also whether someone would be able to install the items in time.

Even earlier this month, Home Depot /quotes/comstock/13*!hd/quotes/nls/hd (HD 35.21, +0.13, +0.36%) had to inform some customers that certain projects wouldn’t be finished before the credit’s expiration, said Bill Phillips, director of program merchandising for Home Depot’s installation business. It’s not only a scheduling hurdle, he adds: Some projects require more lead time, such as custom windows, which can take weeks to get from the manufacturer.

Other projects, such as adding insulation, are doable for an average do-it-yourselfer, Phillips said. But those planning on doing their own installation should also get going, to be in accordance with the law. In the event you’re audited, you’d have to tell the Internal Revenue Service that you installed the items by the end of the year, Moulton said.
The fine print

To ensure the product qualifies for a tax credit, obtain a copy of the manufacturer’s certification letter that says so, Phillips said. You’ll need that for your records, along with all receipts, in the event that you get audited.

Also be aware that installation costs aren’t covered for all projects. For instance, taxpayers get no credit for the cost of having someone install their insulation, doors, windows or roofs. Costs to install water heaters, biomass stoves and heating and air-conditioning systems, however, are covered, according to EnergyStar.gov/taxcredits.

Note that these tax credits are “nonrefundable,” meaning that taxpayers can’t get more back in credits than they pay in federal income tax. That said, for the 2010 tax year, unless you won’t owe anything in taxes, you’d see a benefit, Moulton said.

Also, many taxpayers aren’t aware that a credit gives a “way better benefit than a deduction,” Moulton said. For example, a $1,500 deduction for a married couple in the 15% marginal tax bracket would end up being about a $225 benefit, he says. With a credit, you’d see the benefit of the entire $1,500, he said.

For the more ambitious and green homeowners: A separate 30% credit for other home-efficiency improvements, including solar-energy systems, geothermal heat pumps and wind turbines, is still in effect until 2016. And it doesn’t have a maximum dollar amount.

Amy Hoak is a MarketWatch reporter based in Chicago.

Even the oldest homes can be brought up to modern energy standards.

Historic houses can be updated to the highest standards for resource efficiency and hurricane readiness, without sacrificing their one-of-a-kind character. That’s what Galveston Historical Foundation will demonstrate on October 2, when its Green Revival Show House opens to the public. Visitors will be able to tour the 1890 cottage at 3101 Avenue Q free of charge, on weekends in October and November, noon to 4 p.m.

The event marks the end of an extensive restoration that kicked off last February, when the house, lying askew on its ruined foundation since Hurricane Ike, was hoisted onto steel beams and wheels and towed 17 blocks to a new location. What makes this project so significant is that GHF is targeting LEED Platinum certification from the U.S. Green Building Council, while at the same time carefully preserving the historic value of the house. Because LEED credit requirements often conflict with preservation guidelines, only a handful of historic home owners nationally have attempted the complicated process of meshing the two.

“We wanted to make this a model project for Galveston and other places, but also to explore the full extent of the similarities and disparities between LEED reviews and preservation issues,” says Dwayne Jones, GHF executive director. “This has given us a chance to highlight those things and make it work better for everyone. We want to see more historic home owners take a greener, more comprehensive look at their property, and not just follow the preservation rules we’ve used for many years now.”

Galveston is an island city still pulling itself together after the 2008 hurricane sent a 12-foot storm surge into the interior, and it boasts one of the nation’s largest collections of historic 19th- and 20th-century buildings. With many residents attempting to incorporate more energy-efficient systems into their historic home restorations, the Green Revival House offers timely, practical solutions for sensitively and affordably retrofitting, whether through small measures or whole building strategies.


Galveston is a city that has faced down one devastating hurricane after another in its nearly 200-year history. One takeaway lesson is that preserving historic buildings is greener than building new, since they contain old-growth material that is far denser, stronger, and more durable than the dimensional lumber available today. GHF’s efforts focused on repairing, insulating, and reinforcing the structure, and adding alternative energy. Among the green technologies included are an innovative insulation that resists Galveston’s intense humidity, four solar panels, two rainwater cisterns, and a quiet, bird-friendly wind turbine.

Galveston Historical Foundation, one of the nation’s largest local nonprofit preservation groups, has saved hundreds of houses from demolition. In addition to tours of the Green Revival House, the Foundation will also open the house for weekly seminars by regional experts on weatherization, lead paint, structural durability, renewable energy, and rainwater harvesting.


The project is sponsored by the 1772 Foundation, the National Trust for Historic Preservation’ Partner’s in the Field Program, and GHF. Galveston has the largest contiguous National Historic Landmark-designated areas in the state of Texas. Last year the National Trust named its historic downtown to the 11 Most Endangered Places in the U.S.

GHF will hold an Open House/Membership Drive as the first public event at the Green Revival House, 3101 Avenue Q, on Friday evening, October 1 from 5 to 7 p.m. Those interested in learning more about becoming GHF members are cordially invited, as are current GHF members who bring along a friend or neighbor interested in joining. The event is free but reservations are required due to space limitations. R.S.V.P. by Friday, September 24 to Becky Maixner at GHF, 409-765-7834.

About the Green Revival Show House...

Architectural authenticity: The 1890 house is a cottage-style interpretation of Greek Revival architecture, featuring a four-column front porch, decorative gingerbread, and a small window in each gable. Built prior to air conditioning, its design elements still work well to naturally moderate interior temperatures. A side hall, 12-foot ceilings, transoms, and walk-through windows opening onto deep porches provide air circulation and shade. Energy-efficient magnetic insertion windows were mounted behind the originals, at a fraction of the cost of replacement, and film treatments control heat gain while allowing full light to penetrate.

Material reuse. More than 90 percent of the original materials were preserved, which saved roughly 150 cubic yards of waste from the landfill. Brick from two chimneys dismantled for the move found new life as garden pathways and edging for beds. Porch decks are built from the top layer of interior pine flooring, which was removed to expose the original layer.

Hurricane-proofing. Threaded steel rods, inserted through the wall cavities, pin the roof securely to the foundation. New stainless steel nails and hot-dipped, galvanized hurricane clips reinforce the connections. The new house rises six feet off the ground (17 feet above sea level) on cross-braced piers, reducing the cost of homeowner flood insurance, and a slab-on-grade foundation with louvered skirting lets air and tidal surges circulate under the house while providing secure storage.

Insulation. Removing the original cypress siding was not an option for GHF, as replacement material would change the character of the house. The challenge was to find a high-performance insulation that could be inserted into the existing wall cavity. GHF installed mold-resistant drywall over existing lath and poured in ground polystyrene, recycled from rigid foam board insulation used in new construction. “Other loose fill options weren’t suitable for our humidity,” says project coordinator Matthew Pelz, adding that testing with an infrared camera showed its performance to be on par with other loose-fill insulation, and that the house will be vacuum-tested for air leaks. 

Rainwater reuse: Two cisterns supply water for landscaping, flushing toilets and washing clothes.

Alternative energy. Four solar panels and a wind turbine are expected to cut the energy use in half and will keep the owners comfortable in the next power outage. The spire’s curved blades, which can generate electricity with winds as low as 10 mph, turn slowly so birds can see the motion and avoid flying into it. For both solar and wind technology, GHF selected products that provide the best fit for the site, taking into account solar orientation, wind patterns, and wildlife concerns.

Indy unveils 'green' building incentive progra

By Tom Spalding

Posted: August 2, 2010

 

Indianapolis government leaders have announced a program that provides incentives for property owners and developers to renovate or construct new buildings in a sustainable manner.
The program allows for projects built after Aug. 1 to receive up to a 50 percent rebate on building permit fees associated with the green project. The incentive encourages building owners and developers to integrate sustainable design techniques and practices into building projects.

MORE COVERAGE:The city of Indianapolis' Office of Sustainability website.

Allyson Pumphrey, a city project manager, said in a news release that "green" buildings benefit occupants because they typically use less energy and water and have lower operating costs than traditional buildings. They also reduce storm-water runoff, reduce construction waste, and use renewable materials and energy sources.

“Green buildings are an important component of a more sustainable Indianapolis. With this new green building incentive, our desire is to increase the number of green, or sustainable, buildings in Indianapolis, moving us closer to being one of the most sustainable cities in the Midwest,” said Mayor Greg Ballard, in the news release.

Reach Star reporter Tom Spalding at www.twitter.com/SpaldoBusiness or contact him at (317) 444-6202

Greenbuild International Expo and Conference wants to hear from you

Generation Green: What Are You Doing to Redefine Our Future?

GreenbuildExpo.org is looking for your videos.

Let's face it. So far 2010 hasn't been exactly kind. Every day has seemed to bring a new natural (or unnatural) disaster, partisan discord across the country, and economic news that has kept the world in a state of nervousness and doubt.

We started the year with a devastating earthquake in Haiti and wretched weather that plagued much of the country with school closings, travel interruptions and power outages. Most recently, our eyes have been glued to the terrifying images of an oil spill that threatens the Gulf, its wildlife and the livelihood of tens of thousands of people.

But there are bright spots, as well – many, many of them – and the green building community is at the heart of that optimism. Which is why, in the midst of this year that demands solutions, we want to know:Generation Green, what are you doing?Less than six months from Greenbuild 2010, which promises to be the biggest Greenbuild yet, we hope you're taking this year's theme to heart. "Generation Green: Redefining Our Future." Every day, in ways big and small, our community is taking important steps to redefine our future.

Send us your videos! Please visit www.greenbuildexpo.org/GenGreen today and let us know: What are you doing to redefine our future? Generation Green is not an age group. It's not about politics or personality, demographics or geography. It's all of us. You are Generation Green, and your ideas will inspire the world to act today. And they may be featured at Greenbuild 2010 in Chicago!

What are you doing to take advantage of this watershed moment, when we can push the reset button on the hope that ushered in last year and use it to reignite our energy for the changes we need to move us forward?What are you doing to help the people in Haiti and along the Gulf Coast? What are you doing to support clean energy development? To promote green jobs and a clean, green economy? To push forward retrofits for existing buildings and infrastructure? To get your child in a green school or make sure that there is one in your community? No action is too small, no goal too idealistic, and no person too young or too old or too powerless to make a difference.

We want to hear from everyone – you, your kids, your grandparents. Your colleagues and your classrooms; your mayors, governors and Congress members; your PTA board and your USGBC Students group. We're not looking for expensive, well-produced videos. Your ideas can be simple or profound, general or specific. Just tell us, in 30 seconds or less, how you are building a future of economic, environmental and social prosperity.

Visit www.greenbuildexpo.org/GenGreen to learn how to submit your video and to see what the rest of Generation Green is doing.