Home Energy Upgrade Tax Credits for 2015

As you start the new year and prepare your taxes for 2014, you may want to consider some energy upgrades to your home in 2015. While no new energy tax credits have gone into effect this year, there are a few tax credits from The Energy Policy Act of 2005 that haven’t expired yet, so you can beef up your 2015 return.

Going Solar

According to the U.S. Department of Energy, installing solar electrical systems (such as solar panels) or solar water heaters during 2015 is worth a tax credit for 30% of your installation expenses. 

The credit applies to all solar electric or water systems put in use between January 1, 2006 and December 31, 2016. For systems put in place after 2008, there is no maximum credit allowance (otherwise, the limit is $2,000). The home must be owned by the taxpayer, but does not have to be his principal place of residence (so the credit applies to rental properties you may own, too).

In regard to a solar water-heating system, the Solar Rating Certification Corporation must certify its performance, or an organization endorsed by the state of Missouri. In order for installation expenses to be eligible for a tax credit, at least half of the dwelling’s water must be heated by the system. And it can’t be applied to systems used only to heat swimming pools or hot tubs.

Fuel Cell Power

This same tax credit applies to fuel cells installed between January 1, 2006 and December 31, 2016. According to FuelCells.org:

A fuel cell is an electrochemical device that combines hydrogen and oxygen to produce electricity, with water and heat as its by-product. In its simplest form, a single fuel cell consists of two electrodes - an anode and a cathode - with an electrolyte between them. At the anode, hydrogen reacts with a catalyst, creating a positively charged ion and a negatively charged electron. The proton then passes through the electrolyte, while the electron travels through a circuit, creating a current. At the cathode, oxygen reacts with the ion and electron, forming water and useful heat. This single cell generates about 0.7 volts, just about enough to power a single light bulb. When cells are stacked in series the output increases, resulting in fuel cells anywhere from several watts to multiple megawatts.

The maximum credit for a fuel cell is $500 per half kilowatt (kW) and the home the fuel cell system is installed in must be the tax payer’s primary residence.

Additional Items

This tax credit also applies to small wind-energy systems (wind turbines) and geothermal heat pumps installed between January 1, 2008 and December 31, 2016. They do not need to be on the taxpayer’s primary place of residence.

A few other restrictions apply for some of these items. Complete details are available on the U.S. Department of Energy website. If you’re interested in an energy upgrade that will both benefit the planet and your 2015 tax return, contact HA Construction for a quote on the project.

What to Look for When Buying a Home

Avoiding the Chameleon Fixer-Upper

It’s still a buyer’s market. If you’re looking for a home, the selections available are practically endless these days. One thing to be aware of, however, is that several sellers may be desperate to do so, which means there may be issues with the home that they try to conceal or fail to disclose, leaving you, the new home owner, with a lot of repairs on your plate. This can be especially true for an older house.

There are, of course, always indicators, but sometimes even professionals can mistake a serious problem for normal wear and tear. As you examine your options, utilize these tell-tale signs to help make sure you’re not walking into years of repairs when the home of your dreams turns out to be a chameleon fixer-upper.

Foundational Issues

Everyone thinks of a crack in the wall when there are foundational issues. While cracks can certainly lead to a problem, and big cracks mean big issues, some foundational problems can’t be seen with the naked eye. Here are a few other indicators to watch for as you house shop:

• Doors or windows that don’t open or close properly
• Unlevel floors
• Cracks starting at the corner of doors/windows and taking a diagonal track
• Gaps between the ceiling and upper kitchen cabinets, or cabinet doors that won’t close
• Leaks around the fireplace
• Gaps in the corners of fascia trim

Water Damage

When it comes to older homes, water is the number one cause of damage. But that doesn’t mean it will be as obvious as some black mold somewhere (and even that isn’t often visible without digging into the walls). Indicators that a house may have underlying water damage may include the following:

• Clogged or disconnected gutters/downspouts (always a good idea to get a record of how often they’re cleaned)
• Roof shingles that are missing or damaged (may indicate a leak)
• Trim boards that are loose or even showing signs of rot
• A sloping grade toward the perimeter of the home may indicate settling and water in the basement/foundation

Outdated Electrical System

They don’t make ‘em like the used to… thank goodness. Without any intervention, older homes do not have the electrical capacity to hold all the wattage of today’s appliance heavy homeowners. Think about it – before it was just a couple of lamps and a radio in the house – nowadays there’s a TV in every room, a cappuccino machine, blender, coffee maker, toaster and fridge in the kitchen and ten different hair appliances in the bathroom.

This is certainly something you need to look for if a home you’re interested in is more than 40 years old. The following may indicate that the electrical system needs updating, and bringing it to code can get expensive:

• The fuse box or electrical panel has a capacity of less than 100 amps (100 or more amps are necessary for modern homes)
• Aluminum wiring (discontinued because it’s a fire hazard)
• An inordinate amount of extension cords and adapters in use by the current owners
• Rooms without outlets
• Burn marks on switches or outlets

Not Energy Efficient

Many older homes were not made to be as energy efficient as new buildings. For example, there may be inadequate insulation in the walls, as standards for insulation have increased in recent years (turn-of-the-century homes may not have insulation at all in the walls). Additionally, the HVAC system may not be of the capacity necessary to handle the size of the home. Basically, you need to ask questions to see what steps the previous owners have taken to update the energy efficiency of the home or if it would be worth the investment to go ahead and buy and do some updates of your own.

Things the Seller can Hide Easily

Sellers that are desperate to do so may work to make the home look more presentable before you come to see it – meaning they’re hiding issues that may cause problems for you down the road if you buy. For example, sellers may:

• Clean up rodent droppings and indications of other infestations
• Filling in cracks in the walls that indicate foundational issues
• Oil floorboards to stop them from creaking (another indication of foundational issues)
• Painting the ceiling to cover leak stains

Have an Inspection Clause

Best practice is to first thoroughly examine the disclosures provided by the seller and ask yourself if any of them may indicate another problem with the home no mentioned. If you’re just in love with the home and want to put in an offer, make sure that your offer comes complete with an inspection clause. This basically means that if the inspection of the home turns up any issues, either the seller agrees to fix them, or you have the right to walk away from the contract without consequence.

And, if you just can’t pass up that beautiful turn-of-the-century home with lots of character, but it still needs some work, contact HA Construction to help with the updates, renovations and repairs. And make it the home of your dreams.

Making Your Home Energy Efficient

Cutting costs is a must these days. Making your home energy efficient isn’t just about getting the most use out of it as possible anymore – it’s about saving as much money as possible, too. There are many ways to maximize the efficiency of your home. Some require the assistance of a professional like HA Construction, others you can accomplish on your own with a small time commitment.

Quick, Easy and Worthwhile Changes Around the House

By making a few changes in your everyday approach to your home, you can conserve energy. If you haven’t done so already, implement these strategies:

• Unplug appliances that aren’t in use. Even if you have them turned off, just having them plugged into an outlet still drains some power. Appliances account for up to 20% of energy bills, so even the small things can make a difference.
• Turn lights off as you leave a room. Better still, open your curtains and use natural light as often as possible.
• Utilize sleep mode features for your personal PC. While the general consensus is that it’s better to keep your PC on, you should still utilize the sleep mode feature and turn off the monitor when it’s not in use. If it’s going to be more than a day until you use it again, go ahead and turn off the whole system.
• Replace every light bulb in your home with florescent bulbs. This may be a well-known fact these days, but reminders are still nice. According to ENERGY STAR, Florescent bulbs use 25% of the energy that incandescent bulbs use, saving $6 per year per bulb, and $40 over the lifetime of one, solitary bulb.
• Turn your heat/air conditioning down at night, and when you won’t be in the home for several hours.

Take it One Step Further

You really won’t know what your home needs to become more energy efficient without a home energy assessment. This will help you to see where your home uses the most energy and where changes need to be made, including your heating and cooling system.

You can, of course, conduct an energy assessment yourself by taking the following steps:

1. Walk around your home and make a list of areas where you feel obvious drafts. Places to check include electrical outlets, window frames, switch plates, baseboards, door frames, attics, etc.
2. Check caulking and weather stripping, both indoors and out, around doors and windows. Make sure there are no gaps and it’s properly installed (if you can see light coming through the sides of an outer door, then the stripping isn’t installed right).
3. Do a building pressurization test. Close all accesses to the outside (doors, windows, fireplace flue, etc), then turn off all combustion appliances (water heaters, furnaces, stoves, etc). Turn on your bathroom and kitchen exhaust fans to suck the air out of the home – this will pull air through cracks and leaks more readily so you can detect them easier.

While these personal assessments may have obvious results, you might be better suited to hire a professional to do a complete energy assessment of your home, so that you leave no stone unturned. Professionals use state-of-the-art equipment to detect problems. Infrared cameras show the warmest and coldest areas of your home, helping you to see where you might have inadequate insulation issues. Blower doors check for leaks. To find an energy assessor you can trust, contact your local government offices for recommendations.

Changes that Require a Bit More Time and Financial Investment

Now that you’ve made the easy changes and conducted an energy assessment of your home, you may find that it’s time to implement more radical changes that require time and money. Many older homes don’t have adequate windows to keep indoor and outdoor temperatures in their respective locations. You may also find that, while the insulation used in your home when it was built met requirements at the time, it’s insufficient now and needs to be replaced. You may even discover that your furnace is too small, working harder than it should to keep your home comfortable. Or maybe you just want to convert your cold, drafty attic into an energy efficient master suite.

HA Construction can help you with these projects, big or small. Contact Andy today to make a difference in your home energy bills. While an initial investment is required, you’ll save your family money in the long run. And, who knows, you may just find yourself enjoying a movie night with your family without having to huddle together under a stack of blankets to keep warm.