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How to lower your utility bills
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How to lower your utility bills

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There’s no better time to give your home a makeover than the start of a new year. If you don’t have the money to remodel, here are a few things you can do that will completely change the look of your home without spending too much. Buzz60’s Johana Restrepo has more.

A big cost of owning a house is what you spend on energy, but Uncle Sam offers tax breaks for energy-efficient home upgrades that can also lower utility bills.

For existing primary residences, putting in energy-efficient windows, doors, furnaces, air conditioners, insulation, water heaters, roofs and other items qualifies you to take a tax credit of either 10% of the cost or specific amounts ranging from $50 to $300, depending on the improvement. The credit is currently set to expire at the end of 2021, and a lifetime cap of $500 applies to the total value of credits you can get in all tax years after 2005.

You can snag a more lucrative tax credit for certain renewable-energy systems. You can get a 26% credit for projects placed in service by the end of 2022, or 22% for projects placed in service in 2023. Check for state and local incentives and rebates, too. To see incentives available in your area, enter your zip code at dsireusa.org and energystar.gov/rebate-finder.

Here are five upgrades that qualify for tax credits and can pay off in energy savings.

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Uncle Sam offers tax breaks for energy-efficient home upgrades that can lower utility bills.

Insulation and air sealing

Savings: An average 11% on total energy costs — for those who air seal their houses and add insulation in attics and crawl spaces or basements, according to the Environmental Protection Agency.

Tax credit: 10% of the cost of bulk insulation and air-sealing materials (not including installation).

Solar panels

Savings: As much as 100% of the cost of your electric bills. Recouping the cost of installing solar power in savings on your energy bills typically takes five to 12 years.

Tax credit: 26% for solar projects placed in service by the end of 2022 or 22% for projects placed in service in 2023.

Heating and air conditioning

Savings: Replacing a decade-old heat pump or air conditioner with a high-efficiency unit can save up to 20% on heating and cooling costs, according to Energy Star. Certified gas furnaces are up to 15% more energy-efficient than standard models and can save you up to $85 a year.

Tax credit: Up to $300 for qualifying central air conditioners and air-source heat pumps; up to $150 for qualifying gas, oil or propane furnaces and boilers.

Windows

Savings: Replacing single-pane windows with Energy Star-certified windows can save you from about $100 to nearly $600 in household energy bills a year for an average-size home, according to estimates by D&R International.

Tax credit: 10% of the cost of any Energy Star-certified window, skylight or door (not including installation).

Water heaters

Savings: An Energy Star gas storage water heater uses 10% less energy than a standard model, and a family of four can save hundreds of dollars in energy costs over its lifetime, according to Energy Star. With an electric heat pump water heater, a family of four can save as much as $3,750.

Tax credit: Up to $300 for qualifying gas, oil, propane or electric heat pump water heaters.

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