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| Home Energy Tune-uP® |
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- Increases comfort
- Saves you money
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- Adds to a home’s value
- Improves the environment
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STEP 1 INSPECTION
Our certified energy inspector examines and measures the home and finds all opportunities for energy savings.
- To reduce utility bills, the first step is to find out where you are wasting energy.
- To do this, you need a residential energy inspection—which should be done by a certified energy inspector who has no financial interest in the improvements recommended.
- The energy inspector will examine, measure, and evaluate the factors that affect energy use in your home, e.g., size of the home, efficiency of appliances, insulation, draftiness of rooms, and efficiency of heating and cooling systems (HVAC).
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STEP 2 DETAILED ANALYSIS
Specialized software produces a Report which shows savings and costs for energy efficiency improvements.
The information gathered during the energy audit is analyzed using specialized software to produce a comprehensive Home Energy Tune-uP® Report. The Report shows which energy-efficiency improvements would reduce energy costs and make the home more comfortable. The analysis takes into account regional variables such as local weather, implementation costs, and fuel prices.
The Report contains estimates of the savings, costs and payback for each energy-efficiency recommendation. It identifies the group of improvements that, if financed, will save more on energy bills than it costs. These are the improvements that everyone can make since they require no out-of-pocket cost when financed.
The detailed Recommendations section enables contractors to provide preliminary cost estimates without a visit to your home. It also explains how to get the best energy savings from these improvements by listing related no-cost low-cost measures that you can take. See a Sample Tune-uP Report |
STEP 3 IMPLEMENTATION
The Report provides access to a database of contractors and a direct line to an energy expert.
- Contractors.com By entering your zip code and the type of service you are interested in, you will be able to access contractors in your area.
- NATE Approved HVAC contractors. Visit www.natex.org
- Angie’s List: An online, fee-based membership database containing contractors who have been recommended by homeowners. Not available for all areas, but the coverage is growing. Visit www.angieslist.com
- CMC Energy Services: Provides a technical expert to advise you and answer your questions about the Home Energy Tune-uP® energy inspection performed on your home. Call Our Expert (866) 843-5500.
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STEP 4 FINANCING
Each Report lists the group of improvements that, when financed, will save more than they cost. Energy improvements are unique because they reduce energy bills thereby increasing disposable income.
Financing energy efficiency improvements as part of your home mortgage is the best way to go. You have the advantage of (1) low monthly payments due to a 30-year term and a relatively low interest rate; and (2) interest that is deductible from your income tax.
The improvements listed in the Improvements that Save More than they Cost section of the Tune-uP Report will automatically qualify for financing since they increase the value of the house without reducing disposable income.
- The FHA Streamlined (k) Limited Repair Program is intended to facilitate uncomplicated rehabilitation and/or improvements to a home for which plans, consultants, engineers and/or architects are not required.
- The Streamlined (k) program includes the following energy-efficiency improvements:
- Upgrade of heating/cooling systems and water heaters;
- Weatherization, including insulation, seal-up and window replacement;
- Purchase and installation of appliances, including refrigerators, freezers, and washers/dryers.
- It has no minimum repair cost threshold.
- It has a maximum mortgage amount for repair costs of $35,000.
- It can be issued by any FHA lender.
- It does not require a rating.
- See HUD Mortgagee Letter 2005-50 for details of the program.
The unsecured Fannie Mae Energy Loan for $1,000 to $20,000 is available from a few lenders. The Energy Loan’s 10-year term and interest rates are generally better than those offered by contractors or suppliers, though not as good as the Streamlined (K).
- Some electric or gas utilities offer financing for energy efficiency improvements, as well as rebates for energy efficient appliances and heating and cooling systems. Check your utilities' website for more information about financing and rebates that may be available. See the Energy Star Rebate Locator
Energy Loans, Incentives, and Initiatives
Nationally Available
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Lower Your Energy Bill and Your Tax Bill
Now is the time to improve the energy features of your house. During 2006 and 2007, you can recoup your investment by lowering your energy bills and by saving up to $500 on your tax bills.
Replacing your older air conditioner, heat pump or water heater could save $300 from your tax bill;
Replacing windows could save you a maximum of $200; and
Installing insulation may allow you to take a credit for 10% of the material costs.
The Table below shows the required efficiency for equipment.
| Equipment |
Minimum Rating |
Tax Credit |
| Central Air Conditioner |
15 SEER |
$300 |
| Heat Pump |
HSPF 9
SEER 15 |
$300 |
| Furnace or Boiler |
AFUE 95 |
$150 |
| Water Heater |
80% efficiency |
$300 |
| Main Circ. Fan |
Max 2% of furnace energy use |
$50 |
- All purchases must be made during 2006 or 2007;
- For IRS purposes, the costs are considered paid when the original installation of the item is completed;
- The tax credit can be claimed on your taxes only at the end of the year;
- You must keep your dated receipts for all eligible purchases; and
- The energy efficiency improvements must be for your primary residence.
See IRS 2006 Tax Changes for Individuals-Residential Energy Credits and IR-2006-34. For detailed information, see IRS Notice 2006-26 and Clarification of Notice 2006-26.
What is a Tax Deduction?
There is an important difference between a tax deduction and a tax credit. A tax deduction is subtracted from income before total tax liability is computed. On the other hand, a tax credit is subtracted directly from the total tax liability. This means that a deduction and a credit have very different values, with a credit being three or more times more advantageous to the taxpayer than a deduction. For example, a tax credit of $500 for someone in the 28% tax bracket is equivalent to a tax deduction of $1,785. |
