This year, Blog Action Day is focused on global climate change. One of the things you can do to help reduce the effects of climate change is use energy more efficiently.
You know that if you make home improvements using a home equity loan or home equity line of credit, you can get a tax break on the interest that you pay. But before you get too far into the home improvements, stop and think about whether you might want to engage in some green home improvements as well. Through 2010, you can get tax credits for certain home improvements. You can get 30% of your expenditures back, up to $1,500. (This is $1,500 total for 2009 and 2010.) Here are some of the green home improvements that are eligible for the $1,500 tax credit:
- Non-solar water heaters
- Biomass stoves
The tax credit for the above items is only available for existing homes.
Large green home improvements — overhauling your home’s energy system
If you are interested in overhauling the entire energy system in your home, you can do so by installing solar panels, geothermal heat pumps, wind energy systems and fuel cells. These, however, are much more expensive. Which is why the tax credit for these items have no upper limit, and is available until 2016. You can qualify for 30% of the cost of installation of these items on any new or existing home.
In addition to receiving the tax credit, you will also save money on your home’s energy consumption. Green home improvements have the potential to pay for themselves in five to 20 years, depending on the extent of your improvements, and the incentives you get to help pay for them.
Learn more about green home improvements and tax credits at the government’s Energy Star web site.