Industry Update
Connecting members to stimulus savings
It’s all over the news; with the passage of the federal stimulus bill there’s money available to help many Americans weatherize homes and make energy efficiency improvements. But how can residents in the Wiregrass area connect with these resources? Wiregrass Electric Cooperative (WEC) is ready to help as the American Recovery and Reinvestment Act of 2009 goes into effect. As information is updated by the government, WEC will continue to update this information here for you.
“The state of our economy has left many Wiregrass Electric members searching for ways to make ends meet,” explains Michael S. McWaters, CEO of Wiregrass Electric. “Making the most of each energy dollar is high on everyone’s list of concerns. We’re ready to help explain which parts of the stimulus bill may affect you, especially if you’re considering energy efficiency improvements.”
Investing in a few basic measures to secure a home from outside elements could provide major benefits. The U.S. Department of Energy (DOE) says weatherization—the process of sealing air leaks and properly insulating a home—can reduce heating bills by up to 32 percent, resulting in an average energy savings of $358 per year.
“You can be more comfortable, and save on your energy bill while improving the environment,” adds McWaters. “Making our nation more energy efficient takes all of us doing our part, and the stimulus bill provides new ways for you to save money while you’re doing it.”
Department of Energy's Weatherization Assistance Program
As a result of the stimulus package, DOE’s Weatherization Assistance Program is expanding with a goal of weatherizing one million homes per year. In the past, only households that earned up to 150 percent of the national povertylevel were eligible to participate. The stimulus bill extends eligibility to those with incomes below 200 percent of the national poverty level. For a family of four, that’s an income limit of $44,100.
Program participants receive a professional energy consultation with an analysis of energy bills, a blower-door test to locate air leaks and advice on how to be more efficient. Workers then arrive to make energy upgrades like insulating walls and roofs, sealing air leaks, and installing more efficient heating and cooling systems. The process to weatherize a home through the program usually takes two days with an average cost of $2,500. Since some homes have different needs, the stimulus bill allows up to $6,500 to be spent on each home.
Weatherization programs will be handled differently in each state. In Alabama, eligible members should contact the Organized Community Action Program at 334-566-1712 or download a pdf version here to request an application to apply for weatherization services.
How do I apply for Weatherization?
Efficiency Tax Credits
For members not eligible for federally funded programs, the stimulus plan provides a homeowner an efficiency tax credit of up to $1,500, or 30 percent, of the cost for new energy upgrades, including weatherization activities as well as installation of efficient heating, ventilation, and air conditioning systems. Efficiency tax credits were already available for 2009, but carried a $500 limit (with additional caps for certain types of upgrades) and only covered up to 10 percent of a member’s investment.
“You may have looked at the tax credit in the past and thought it wasn’t worth it,” notes McWaters. “This change effectively triples the amount of financial investment you get credit for, and, coupled with how much you can save on energy costs each year, it makes these efficiency measures much more affordable.”
Tax credits directly lower a member’s federal income taxes, and are generally more valuable than tax deductions because they reduce taxes owed dollar-for-dollar. In contrast, a tax deduction, like a home mortgage or charitable gift, lowers taxable income and may only offer small savings. For example, a $1,500 tax deduction for someone in the 25 percent tax bracket would lower taxes owed by $350; a $1,500 tax credit for energy efficiency efforts will lower taxes owed by $1,500!
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