This week I have started preparing all the paperwork for the April 15th tax deadline. I wanted to make sure we could take all the tax credits that surely were coming our way after investing so much time and money into building a soon-to-be LEED Certified home.
It’s not looking so good. First, there is a 30% federal tax credit for efficient windows, doors, insulation, and roof — of which all of what we own would qualify. But, that credit is capped at $1,500 total — not just for each major purchase, but for everything all together. Okay, I’ll take a $1,500 tax credit. But wait….if you navigate further into the Energy Star website, you discover that only existing homes qualify. New homes do not qualify! Of course not. Why would they? So, I don’t get that $1,500 tax credit.
But there is more. For geothermal systems, there is a 30% tax credit, and it is not capped. (For a good background on geothermal, see the Ground Source Heat Pump Association’s website.) Our geothermal system was a significant amount of money, so this one is definitely going to be good! But wait….when we ordered the geothermal system, this 30% tax credit was not part of the law. So we did not pay too much attention to the specific model number. When I looked into it a few months ago, our particular type of system (water-to-water, which is much more efficient than air-to-water), was not even eligible. Now, water-to-water systems are eligible, just NOT OUR SPECIFIC MODEL!!
I spoke with our Mechanical System contractor today to yell at him for picking the wrong model, but it turns out I can’t even be mad at him. I can only be mad at the ever-changing laws written by who knows that are designed to encourage people financially to invest in energy efficiency. I like the intention. I just do not like how it plays out in reality.
Ugh – what a bummer that you faced this “model number” problem in getting the discount! My parents in Pennsylvania just had a geothermal system priced out, and although the costs (and 30% savings) are more than reasonable, they are in their 70’s so they were not sure that the investment would be realized during the remaining years in that home. Secondly, they were concerned about the amount of “front yard drilling and excavation” that was part of the proposal. I wonder if you could speak to your experiencing as a *new home* builder on the drilling and excavation? Thank you!
Thanks for the comments, Dianna – you raise two interesting points. First, on the drilling: it typically is easier for a new home, since the lot was empty when we started. We have ten holes drilled underneath our driveway (so no tree roots can interfere with the tubes), and it was relatively painless. Vertical loops also take up less space than horizontal loops, so that can mitigate a big mess. In either case, though, in a remodel, there will be something that has to get torn up.
Regarding the savings over time, I understand their concern, but they could live another 30 years, right? In any case, a geothermal system increases the value of their home because it significantly lowers their utility bills. What a great legacy! And, they will no longer have to deal with outdoor air conditioning compressors — a big plus. I’d recommend it — they are helping save the world for the next generation.