Put Money Back in Your Pocket With Energy–Efficient HVAC
Tired of sweating through summer with your old air conditioner, or shivering at the thought of another winter with that cranky old furnace? Installing new high-efficiency heating or cooling equipment can save you big time on utility bills, and federal tax credits can help you pay for them.
Cool Cost-Cutting
How is your central air conditioner holding up this summer? If it’s more than 10 years old, it’s approaching the end of a normal life cycle and is probably far less efficient than models available today.
If replaced with a high-efficiency central air conditioner or heat pump, you can save up to 20 percent on your cooling bill. Depending on the price of electricity and your typical consumption rate, the savings can be at least $100 per summer – every summer from here on out.
Models that earn the Department of Energy’s ENERGY STAR label cost more than less efficient models, but most qualify for a tax credit of up to $1,500. So, for example, if the total cost for a new ENERGY STAR unit (including installation) is $3,000, you’ll add $900 to your 2010 tax refund or shave $900 off of what you owe.
Every new model carries a clearly marked efficiency rating, called SEER (Seasonal Energy Efficiency Ratio). The higher the number, the greater the efficiency. In order to qualify for the federal tax credit, the SEER rating must be greater than or equal to 16 for a split system or 14 for a package system.
Warming Up to the Idea
It may be hard to think about your furnace during the dog days of summer, but cool autumn nights will be here before you know it. Then comes Old Man Winter. If your furnace is more than 15 years old, it may be operating 40 percent less efficiently than an ENERGY STAR-qualifying unit. Forty percent!
Using the savings scenario for air conditioners above, that means a new, high-efficiency furnace could save you around $300 on heating bills every year. Throw in the same tax credit of 30 percent of the cost, up to $1,500, and you can see how this investment can quickly pay for itself.
Instead of SEER, new furnaces carry an AFUE (annual fuel utilization efficiency) rating, which needs to be 95 or higher to qualify for the ENERGY STAR tax credit.
The best way to find tax credit eligible equipment is to ask your heating and cooling contractor. They will also provide you with the Manufacturer Certification Statement for the equipment you plan to purchase. For more information on ENERGY STAR equipment and qualifying tax credits, click here.
Perhaps the biggest and most overlooked payoff can occur when you sell your home. Few items please potential homebuyers like up-to-date, high-efficiency heating and cooling systems.
So stop spending too much, or worrying about equipment breakdowns or your home’s resale value. You can start saving without dipping into your savings, and get the credit you need to take advantage of the tax credit (which is set to expire after 2010) by financing the new equipment with a Commerce Bank Home Equity Line of Credit or Home Equity Loan.
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