Tax bill keeps energy credits in 2011

Dec 27 - Columbus Telegram, Neb.

Homeowners looking to make upgrades on Uncle Sam's penny have another year to do so, thanks to an extension of the home energy-efficiency improvement tax credits.

The extension, which was included in legislation that renewed Bush-era tax cuts, allows individuals to receive tax credits for installing qualifying energy-efficient windows, doors, water heaters, roofs, insulation, heating and air-conditioning units and biomass stoves at principal residences.

However, those who aim to take advantage of larger savings must act quickly, as the extension calls for a significant reduction in tax-credit amounts from this year.

For installations occurring before year's end, the program offers a tax credit equaling 30 percent of the homeowner's cost, up to $1,500. This includes labor expenses on water heaters, heating and air-conditioning units and biomass stoves.

Next year the cap will be reduced to $500, and credit percentage will vary depending on what improvement is made. The tax credit is also retroactive to Dec. 31, 2005, meaning a homeowner who has claimed at least $500 in energy-efficiency tax credits between 2006 and 2010 can't do so in 2011.

Do-it-yourselfers may still have time to make some qualifying improvements before Saturday, but the opportunity to have a professional do the work has most-likely passed.

Randy Wieser, owner of Columbus Door & Window Manufacturing Co., said orders there were needed by mid-November to allow for shipping and installation before 2011.

At Total Comfort Heating & Air Conditioning, 3617 Howard Boulevard, customers were given a Dec. 10 deadline to guarantee installation before year's end, according to co-owner Steve Simmons.

"We can't even take any more (orders) right now we're so booked up," he said.

The tax-credit extension comes as welcome news to Columbus retailers of these energy-efficient products, as they helped provide a major boost to business during 2010.

"It has definitely had an impact on our business," said Wieser. "There's no doubt about it."

Columbus Door & Window Manufacturing, 1054 26th Ave., realized a 25 to 35 percent increase in business from customers looking to utilize the tax credits, Wieser said.

Rocky Keyes, president and owner of Energy Savers of Nebraska, reported a $30,000 sales jump from 2009 to 2010, which he credited to consumers seeking more energy-efficient foam insulation, windows and doors from the 3722 13th St. business.

"Windows are probably the biggest heating and cooling loss in the home," said Keyes. "Doors are a big factor, too."

Simmons said people started getting serious about the tax credits about two months ago, resulting in a two-fold increase in November-to-December sales at Total Comfort Heating & Air Conditioning over the same period last year.

"The other thing that we've seen is people are moving to higher-efficiency systems," he said, "which benefits everybody."

Aside from the tax credits, homeowners making the switch to more-efficient items should also see savings in their monthly utility bills.

Replacing windows and doors, according to Keyes, can reduce heating and cooling costs by 30 to 40 percent, depending on the age and size of the home.

Upgrading a 20-year-old heating and cooling system could lower a utility bill by as much as 50 percent, Simmons said.

"And the higher utility rates go, the more you save," he added.

Homeowners really looking to "go green" can also apply for separate tax credits on geothermal heat pumps, residential wind turbines and solar energy systems. These credits are available through 2016, and apply to existing homes and new construction for both primary and secondary residences.

For more information on the energy-efficiency tax credits, visit www.energy.gov/taxbreaks.htm.

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