The term “green” is being used a lot these days, but what does it mean? The earth’s reserves of fossil fuel are not unlimited andeventually will run out. More than 80% of the world fossil fuel supplies are located in less than 5% of its territory, and we are all dependent on the countries who control these territories. As the supplies become scarcer, the price is rising, leading to the need and desire for alternatives to fossil fuel based energy. These alternative methods of producing energy are part of what is “green” in today’s world.
The carbon footprint attached to fossil fuel is the leading cause of air pollution in the U.S., leading to smog, acid rain, and greenhouse gases among others. The burning of fossil fuels results in a higher level of carbon dioxide. This leads to the trapping of heat in the earth’s atmosphere which causes global warming.
There are two main reasons to choose renewable sources of energy for your home or business, but asmany will agree, “the price must be right”. In the past the HVAC systems utilizing renewable energy sources were considerably more expensive than conventional systems, but not anymore. With rising energy prices, the return on the investment is higher than ever, you can save up to 50% on utility bills and eliminate annual maintenance cost. Of additional value, Congress has given a generous boost to homeowners who want to convert their homes to solar energy, cut their electricity bills with photovoltaic systems or wind turbine or install a geo-thermal system. These tax initiatives, when combined with incentives that already exist in many states, mean that homeowners may be able to get back a sizeable portion of their investment in such systems.
Under the Emergency Economic Stabilization Act of 2008 the federal government granted the following tax credits.
Residential Renewable Energy Tax Credits
Consumers who install solar energy systems (including solar water heating and solar electric systems), small wind systems, geothermal heat pumps, and residential fuel cell and microturbine systems can receive a 30% tax credit for systems placed in service before December 31, 2016; the previous tax credit cap no longer applies.
Home Energy Efficiency Improvement Tax Credits
Consumers who purchase and install specific products, such as energy-efficient windows, insulation, doors, roofs, and heating and cooling equipment in existing homes can receive a tax credit for 30% of the cost, up to $1,500, for improvements “placed in service” starting January 1, 2009, through December 31, 2010. See EnergyStar.gov for a complete summary of energy efficiency tax credits available to consumers.
All of the details about federal tax credits on energy efficiency and renewable energy projects can be found at http://www.energy.gov/taxbreaks.htm.
When combined the federal tax credit and the available state incentives and tax breaks can lead to 50% or more cost reduction in initial investments. Add this to the years of savings on utility bills and you have a substantial return in investment.
If a homeowner is forced to replace their HVAC system (Furnace, boiler, A/C etc.) the average cost will be around $5,000 to $7,000, with annual utility bill of $2,500
The cost of a geothermal system with two wells will be around $20,000, after the federal tax incentive $6,000(30%) the total cost will be $14,000.
With annual utility savings of $1,250(50%) the payback will be 6.5 years.
And keep in mind that the geothermal system will replace both, your heating and air conditioning system.
The rebates, finance programs and tax incentives vary for different states, and they can be found at http://www.dsireusa.org/. For the state of Connecticut you can also check http://www.ctcleanenergy.com/Home/tabid/36/Default.aspx
So why go Green? Why not?