Energy-efficiency-minded homeowners could get three times the existing tax break on their 2009 income tax if they take advantage of provisions in the recently passed economic stimulus bill.
Government officials, home-improvement business owners and homeowners haven't received all the details yet, but about $2 billion over 10 years will be allocated to residential energy-efficient improvements through tax credits from the federal government.
Previous tax credits for energy-saving improvements to a residence were at 10 percent of the amount paid for the improvement with piecemeal caps on specific items, such as $50 for an air-circulating fan, $150 for a qualified oil or gas hot-water boiler or $300 for any energy-efficient building property.
The Leader-Herald/Bill Trojan
Jonathan Kluska, the owner of Mr. Home Improvement of Gloversville, measures a window at 7 Fifth Ave. in Gloversville Thursday.
The new limits set by the stimulus bill are 30 percent of the cost of energy-efficient equipment installed with no individual dollar caps and a total aggregate cap of $1,500 -roughly triple the previous tax-credit amounts.
Local business representatives weren't sure how quickly or actively homeowners would take advantage of the new tax credits.
Duane Phillips, assistant manager of Ace Hardware in Johnstown, said he sells caulking, window treatments, weather stripping and energy-efficient water heaters to his customers, but he doesn't know if the sales will increase with the tax credits.
"I don't expect any big jump [in sales]," Phillips said. "I haven't heard much about this from customers."
Jonathan Kluska of Mr. Home Improvement in Gloversville said he hasn't seen much change in energy-efficiency projects with homeowners.
"I haven't seen any decline in energy-efficiency projects [either]," he said.
Kluska said there are home-energy problems specific to the Northeast that should be taken care of regardless of tax breaks.
"I see a lot of ice build-up and ice dams on roofs and insulation that isn't properly vented," Kluska said.
Craig Clark, community educator for Cornell Cooperative Extension of Fulton and Montgomery Counties, said he's seen an increased interest in energy savings through attendance at his energy workshops.
Clark said in the first five months of Cornell's year, which begins in October, he's seen as many attendees as he did all of last year.
Clark's workshops provide information on how people can save money on utility bills.
"I try to answer as many questions as I can in the workshops," Clark said. "I give people a free tool kit, and they walk out with two or three things they can do right away to save on their utility bills. There are low-cost and no-cost ways to cut bills."
Carole Deyoe of Caroga Lake said she's been thinking about installing solar panels at her home, and the extra tax credits could be the deciding factor.
"I'll have to look into it further," she said.
Veterinarian Amy French at Johnstown Animal Clinic did a solar installation at her business in the fall of 2007 and has thought about doing something similar at her home. Even back in 2007, French said the $120,000 installation had a 40 percent to 50 percent savings with government grants, federal tax credits and low- interest loans.
She expected the electrical generation and hot water heating system to pay for itself in seven years.
"That's at today's electric rates," she said. "And we all know today's cost of electricity will go up."
Marketing Director Amanda Gillen of groSolar, the Vermont-based company that did the installation at French's clinic, said numerous solar provisions in the economic stimulus bill are still being worked out. But Gillen said she expected to see a spike in solar and energy-saving residential installations.
"It's not just a matter of the cost of imported oil," Gillen said. "We all want to be more independent."
Gillen said New York has some of the best rebate incentives through agencies such as the New York State Energy Research and Development Authority of any state.
"A four-kilowatt generation system can pay back $12,000 in rebates," Gillen said.
Tom Lynch, spokesman for NYSERDA, said homeowners can get state grants that complement federal tax credits for home- energy saving and renewable energy projects.
"A typical residential solar panel installation may cost about $30,000," Lynch said. "A NYSERDA grant will cover a third of that cost, reducing it to $20,000."
Lynch said the IRS tax credit cap of $1,500 can then be applied, making the final cost of a $30,000 solar electrical generation installation $18,500.
Internal Revenue Service spokeswoman for eastern New York Dianne Besunder said the advantage of a tax credit is it can be taken off the total owed in taxes, not just to reduce the amount of taxable income.
The stimulus bill - officially known as the American Recovery and Reinvestment Act of 2009 - was passed in February and included $5 billion to help improve the energy efficiency of more than 1 million modest-income homes. The weatherization work is expected to save the average family about $350 on its air-conditioning and heating bills.
At Fulmont Community Action Agency in Fonda, Executive Director Denis Wilson said low-income qualifying renters and homeowners also can be helped with energy-saving applications through its Weatherization Assistance Program.
"There has been a significant increase in funding," Fulmont Weatherization head Don Power said. "Our current budget is $450,000, and we expect it to go to $700,000."
Power said anyone who qualifies for HEAP funding is eligible, and the maximum amount of the assistance has increased from $4,500 to $6,500.
"We worked with about 100 households last year," Power said. "We expect to help about the same number this year, but we will be able to do much more for each household."
Richard Nilsen is a general assignment reporter and can be reached at email@example.com