For most people, a home is one of the biggest purchases they will make in their lives. As an architect, I meet a lot of people who want to make green improvements, but aren't sure where to start. Since my work and passion involves elegant design and sustainability, I spend a lot of time helping people find a path that leads them to a greener home they can afford. The good news is that there are lots of governmental and market incentives that can help homeowners offset the expense of investing in green technologies.
Did you catch the word 'investing' in that last sentence? Even with the incentives, an upfront financial component is required. However, if you choose wisely, your solar panels, efficient windows, or weatherization efforts can pay you back in lower utility bills. Then once you pay off the cost of the upgrade, future savings are pure profit- and hence a good investment!
The Resale Incentive
The eco-minded set will be happy to discover that the real-estate market is evolving along with the green movement. Already, cities such as Austin and New York require energy audits with the sale of any home, which allows the buyer a more transparent look at the efficiency of the home purchased. In addition, the MLS (Multiple Listing Service) is being updated to include the green attributes of the home alongside traditional amenities.
Trends such as these have led to an increased value of homes that already have renewable and efficient systems in place. The investment gets even more attractive: the Appraisal Institute reveals that for every dollar you are able to reduce your annual energy bills, the value of your home increases by twenty dollars. Nice!
Governmental Energy Efficiency Incentives
The importance of energy efficiency has come to the forefront of the ‘green conversation’ in recent years, and the Residential Energy Efficient Tax Credit was created to allow homeowners to save 30% when they replace inefficient doors and windows with Energy Star certified models. Do note that the savings are capped at $1500. While the upfront savings are nice, the true benefit comes with the long-term savings. Investing in efficient doors and windows can save homeowners up to 25% on energy costs, according to Energy Star.
This incentive also carries over to homeowners who choose to better insulate their home, or who purchase energy-efficient boilers, furnaces, water heaters, heat pumps or air conditioners. The application deadline for this incentive is December 31st, 2010.
Before deciding on the best incentives to pursue, it’s a good idea to begin with an energy audit. If you’re not sure whether new insulation, new windows or an efficient heating system would be most beneficial, this unbiased analysis can be useful as you make big picture decisions. With most audits in the $400-$500 price range, you're not paying too much for peace of mind. One local firm that performs audits is the Green Dream Group.
Governmental Renewable Energy Incentives
If your upcoming home upgrades include adding a renewable energy system, such as wind or solar, then you have the potential of saving significant dollars. Through the DCEO Solar and Wind Energy Rebate Program and the Residential Renewable Energy Tax Credit, Illinois homeowners have the opportunity to apply for a 30% state tax credit in addition to a 30% federal tax credit. This means a combined savings of 60% on solar and wind energy systems. Various systems are included, such as: solar hot water systems, photovoltaic panel systems, and wind energy systems. The credits cover the physical product (think actual solar panels or wind turbines), the system calculations (figuring out exactly how many panels or turbines are needed) and the installation. It is important to note that the application deadline for the DCEO Solar and Wind Energy Rebate Program is April 30th of 2010, while the Residential Renewable Energy Tax Credit will continue through 2016.
One Chicago property owner I worked with utilized this incentive to install a photovoltaic solar energy system on the roof above their West Loop condominium. Their savings from the incentives dramatically decreases the amount of time it will take to pay back the investment in the panels. Additionally, during times when the panels are harvesting more energy than is being consumed, the excess energy is sold back to the utility company. Along with other green features, the solar panels helped this project become the pilot project for a single condominium unit going through the Chicago Green Home certification program.
Some local firms that can help homeowners figure out their alternative energy system needs are HarneTech LLC and Pure Energy Alternatives LLC.
If 2010 holds bigger changes for your existing home - such as a large-scale remodel or an addition - don’t risk making bad decisions about your biggest investment by not using an architect. Hiring a good architect will further increase the value of your home, and using a LEED Accredited architect will ensure that the money you spend on efficient systems will yield the return it should.
I’ve highlighted a few of the best incentives, but a comprehensive and nationwide list of all state and federal incentives can be found at the Database of State Incentives for Renewables and Efficiency along with instructions and forms needed to apply for the programs. These can change frequently, so either act quickly or check back often.
Hopefully this has given you a more quantifiable view of some of the benefits in investing in green technology for your home. Now, go forth and make smart financial choices that also make you feel warm and fuzzy!
