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player ready...It wasn’t just another year that faded into the sunset last week. It also was the end of some attractive tax breaks for homeowners who sought to make their homes more energy efficient.
While there certainly were perks for taxpayers, the $858 billion tax bill signed by President Barack Obama in December extended but dramatically cut the dollar amount of tax credits available for energy-efficient home retrofits.
Instead of the maximum tax credit of 30 percent of a project, or up to $1,500, the 2011 credit is 10 percent of a project, or no more than $500. Other restrictions apply, too, like a flat $200 limit for new windows and a $300 limit for the installation of a new water heater. There’s an additional piece of bad news for consumers who were making energy improvements to their homes in phases: Homeowners who already took advantage of the program aren’t eligible for another tax credit.
“The $1,500 was really something that piqued people’s interest,” said Jamie Peters, program manager of the Midwest Energy Efficiency Alliance. “If I was a homeowner and really got into this in 2010, it’d be disappointing that I couldn’t do anything else in 2011.”
A 30 percent tax credit for major projects like the purchase and installation of solar or wind energy systems or geothermal heat pumps continues until 2016, so that segment of the green building market is still on solid ground. In fact, 5,000 to 6,000 solar energy systems are being installed nationally each month, and that momentum is expected to build as the cost decreases, said Mark Burger, president of the Illinois Solar Energy Association.
Others say they think momentum for smaller projects will continue to build as well, despite the smaller tax perks, because the media attention and product manufacturers’ marketing of the tax credit did much to introduce more consumers to the idea of making their homes more energy efficient and less costly to operate.
For instance, in 21/2 hours on Sept. 24, the second round of the Energy Star appliance rebate program resulted in the sale of 27,000 appliances in Illinois, with consumers pocketing $3.6 million in rebates. That was in addition to another $9.4 million in consumer rebates during the first round of the program.
“I’ve never met someone who doesn’t want to save money on their utility bills,” said Chris McAuliffe, owner of CM Real Estate Development LLC, which does green rehab projects in the western suburbs. “There are so many other programs out there. It’s just a matter of the consumer going out there and educating themselves.”
Consumers have to be patient and do their homework, investigating the programs available and then doing the math to weigh whether various financial incentives will offset a project’s investment, given the time a homeowner plans to be in the property.
Among the Web sites to consider is DSIRE (dsireusa.org), a U.S. Department of Energy-funded site that contains a database of state and federal incentives; LEED for Homes Illinois (leedforhomesillinois.org), a site operated by the Alliance for Environmental Sustainability; and the U.S. Green Building Council’s site (usgbc.org).
More programs may be on the way. Twenty-nine states, but not Illinois, participate in Home Performance with Energy Star, a federally sponsored program that looks at a home’s energy efficiency comprehensively, starting with a whole-home energy audit and then home improvements by reliable contractors.
The program, which brings together state energy agencies and utility companies, is being discussed for single-family, owner-occupied homes in Illinois.
Counseling funds: Right before Christmas, the U.S. Department of Housing and Urban Development announced the disbursement of $73 million in housing counseling grants to local, state and national organizations that help consumers secure housing and keep their homes.
The share for Illinois totaled more than $1.3 million to 24 nonprofit organizations. The bulk of those funds was earmarked for comprehensive counseling, but some groups also received separate pools of money to counsel homeowners on reverse mortgages and mortgage modifications and to fight mortgage scams.
In a bit of coincidental timing, a report issued last month by the Urban Institute found that homeowners who received counseling before loan modifications were much more likely to become current on their mortgages.