Save Energy, Save Money

With sensitivity to global warming issues on the news almost daily, it is important to consider how each of us can save energy and do our part to reduce greenhouse gases, and the like. Here are some great ideas for saving energy and for saving money at the same time!

The Federal Energy Policy Act of 2005 allows homeowners to claim up to $500 on their federal income taxes for qualified energy-saving improvements—as long as they have placed them in service on or before December 31, 2008. Here are some items that qualify:

• Central air conditioning units that meet the highest tier standards set by the Consortium for Energy Efficiency (CEE; www.cee1.org). These standards are higher than the Energy Star (www.energystar.gov) standard.

• Upgrades to your home that include such items as insulation, replacement windows, and sealing ducts—which retain cool air—can earn the credit if qualifying products are used. Check the following websites for additional information: www.naima.org, www1.eere.energy.gov, www.efficientwindows.org, and www.energystar.gov.

• Fans for cooling and heating systems that consume no more than 2% of the system’s energy use also can qualify. The Gas Appliance Manufacturers Association marks such units with an italicized “e” in its Consumer’s Director of Certified Efficiency Ratings (see www.gamapower.org).

• Appliance manufacturers must certify that their equipment meets the necessary specifications. Ask for a copy of this certification when you purchase a new appliance and keep the certification on file in case the IRS questions your claim.

• Finally, the $500 credit applies to each improvement made in the two years before December 31, 2008; thus, if you take a $350 credit in 2007, you are still able to obtain a $150 credit in 2008.

• To learn more about the Energy Policy Act of 2005, go to the Tax Incentives Assistance Project at www.energytaxincentives.org.