It is that time of year again. Tax season. As April 15th
draws near our thoughts are on either filing out tax returns on time or possibly a request for an extension. For homeowners who have already filed, they are awaiting their refunds while contemplating how to use the money that Uncle Sam has so nicely said we can have back. Some will save it and some will spend it, perhaps on a vacation or an item they were holding off on purchasing until they got their tax refund.
Many homeowners have their refund ear-marked to be spent on repairs or improvements around the house. Some of these actions will restore the house to a certain level of perfection and some will add to the value of the house. But there is one area of home improvement that can make your tax refund an investment that will actually put money back in your wallet on a monthly basis for years to come. Energy efficient upgrades.
When most people hear the term ‘energy efficiency’ they think of making their lives and the planet as a
whole more green, especially when the use of fossil fuels to heat and power the house are reduced. The ‘Green Effect’ of energy efficient upgrades to your house does not stop there. By improving the insulation of your home and or adding solar panels to your house, your home can become a virtual ATM as you will spend less on heating and electrical bills.
The first step is to have a home energy audit performed on your house to determine the energy efficiency of your home. In New York State, every home owner is eligible for a free energy efficiency audit paid for by New York. The audit determines how efficient your home currently is and what work can be done to make the home more energy efficient. The audit will also determine, based on your most recent heat and electrical costs, how much you could expect to save should you have the energy efficient upgrades made. Additionally, if the home has a central air conditioning system, PSEG Long Island’s Home Performance Direct (HPD) program provides free services during the audit that will result in your central AC system working better and will also provide up to 40 free high efficiency LED light bulbs to replace existing bulbs.
On Long Island, homeowners normally realize an annual savings of 30-50% on their heat and electrical costs when they have energy efficient upgrades made to their home. Those savings that will keep more money in your bank account are like an ongoing annuity from your tax return. Additionally, energy efficient upgrades made to your home will add value to your home should you look to sell it.
We find that most homeowners will realize a 10-20% annual return on investment from their efficiency upgrades, which is of course a tax-free return on investment!