June 8, 2009
Efficiency, credit spur geothermal systems' popularity
By Malavika Jagannathan
Installing energy-efficient appliances and systems can help homeowners with short-term tax breaks and long-term energy savings.
The American Recovery and Reinvestment Act of 2009 — the stimulus bill signed into law by President Barack Obama — included a number of changes to the energy-efficiency tax credits. Federal tax credits for energy-efficiency improvements have been raised from 10 percent to 30 percent, plus a maximum credit of $1,500 for improvements done in 2009 and 2010. Caps on tax credits for installing efficient windows and furnaces have been eliminated.
"The 30 percent tax credit has promoted some definite interest with geothermal," said Mike Alf, sales and business manager for Van's Refrigeration in Oneida. The company installs between 50 and 60 geothermal systems each year in both new and existing homes.
Geothermal systems use the earth's warmer temperatures to extract and distribute heat through homes using a system of tubes. The initial cost of the system — often more expensive than conventional heating and cooling systems — can be mitigated by the 30 percent tax credit. The result: an almost immediate savings in energy costs.
"When we do an economic analysis, usually we're seeing a return of investment between 16 and 40 percent," Alf said.
Geothermal systems are 50 to 70 percent more efficient than most heating systems and 20 to 40 percent more efficient than air conditioners, according to the International Ground Source Heat Pump Association.
In addition to the tax break on annual taxes, residents also could be eligible for certain cash back rewards for installing certain types of heating and cooling systems.
But a complete overhaul of a home or installation of a new system isn't necessary to make some cutbacks on energy costs.
Debbie Lindgren, who runs workshops as part of her company Sun House Solar to help people live in self-sufficient homes, said homeowners can take simple steps to cut back on energy costs and that some of those steps might even qualify for financial help.
"When you're replacing your appliances, you should look at the Energy Star Web site and look at what the appliances are rated," Lindgren said. It also covers computers, printers and even smaller appliances.
Using a surge protector in every room of her home has helped cut back on energy costs by $20 to $30 per month, Lindgren said.
"Every house is different (and) everyone's lifestyle is different," Lindgren said. "People can do things to help themselves."
As a first step, she suggests getting an energy audit by a professional consultant, which can highlight the ways a home is losing energy and show how to be more energy efficient.
Source: Focus on Energy