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Summary: Federal Energy Act Benefits and Florida Incentives For Homeowners and Builders in 2006
A massive federal energy bill signed into law on August of 2005 by President Bush provides 14.5 billion in tax breaks for builders and homeowners. Encompassing a variety of solar and energy efficient technologies, this law brings good news. Incentives come in the way of energy tax credits- a credit applied directly against the total tax liability—for
Under this legislation, an existing homeowner or new home buyer can claim tax credits for installing solar hot water or solar electric systems in a new or existing home. The builder constructing an energy efficient home can claim a tax credit as well. Treated like a payment already made toward the taxes you owe, a tax credit provides a “bigger bang for the buck” than a tax deduction.
In essence, a single home can be eligible for all of these credits, with the existing homeowners or new home buyers claiming the solar credits. A homebuilder can claim the energy efficient credits on each new home they build. This makes green and efficient new housing a win-win situation for builders and clients.
Currently set for a two-year run beginning January 1st, 2006 tax credits could be extended through 2009. Tax credits for residential solar energy systems apply to both solar water heating and photovoltaic systems. And, homeowners can take advantage of credits for one or both technologies. Each is capped at a maximum of $2,000.00; this credit is equal to 30 percent of the installed system cost.
The Federal Energy Act that goes in to effect on January 1st, 2006 has especially lucrative incentives available to home buyers for integration of solar technology and energy efficiency measures into their mortgages and can result in a net profit of $1,400.00 to over $3,000.00 during the first year of the loan.
The federal government will also provide a tax credit of $2,000.00 to builders for each home built that reduces heating and cooling costs below 50% of the Department of Energy’s criteria for heating and cooling. Heating and cooling costs are typically 36 to 46% of an average homes yearly utility bill.
Hot water will be 20 to 35% of a homes yearly utility bill. A solar water heater will eliminate 80 to 95% of the bill for hot water heating. Solar water heating systems typically result in a $1,400.00 to $1,600.00 net profit in the first year of the mortgage for a new homeowner, since 30% of the cost will be paid by the federal government. Each succeeding year the yearly hot water savings and the itemized deductions of the mortgage loan will exceed their yearly mortgage by two to four hundred dollars. If a builder does not offer the home buyer a solar water heating system under the Energy Act, the home buyer will loose $1,400.00 to $1,600.00 profit since this option was not included with the new home.
Builders who reduce heating and cooling costs by 50% and add a solar hot water heater that qualifies for the 30% tax rebate will cut the homeowners average total yearly utility bill by 40 to 55%. Combined, these yearly savings on heating and cooling and hot water, will save a family of 3 or 4 well over $1,000.00 per year. Taking into account your tax bracket, $1,000.00 saved will be equal to $1,200.00 to $1,500.00 in earned income. Every year as fuel costs increase your savings will increase as well. (To say nothing of the added equity in a home equipped to be efficient and hold down expenses for years to come and will have a higher resale value for approximately $4,000.00.)
☼ More Good News for Homebuilders and Homeowners in Florida. ☼
Florida has also initiated a program for homebuilders when they agree to offer solar hot water heating to all prospective home buyers. Builders who agree to present a solar hot water heater as an option on every home they build will qualify for an additional $500.00 incentive, if the home buyer chooses the solar water heating system. (www.sunbuilt.org)
Gainesville Regional Utilities also has a immediate utility credit or cash rebate to existing homeowners, home buyers, or builders who are G.R.U customers when they install a solar hot water system from $280.00 to $600.00 dollars.
Education for the builder, the homeowner, real estate professionals and lenders are key to these state and federal programs success. As lucrative as all these federal and state incentives are, there is a major problem:
NO MONEY IS EARMARKED TO EDUCATE THE PUBLIC ABOUT THESE PROGRAMS OR WHICH BUILDERS ARE OFFERING THESE INCENTIVES.
Any builder can say that they built an “energy efficient home” or a “luxury home” -- both are just opinions. However, the Federal governments’ new standards for cutting heating and cooling costs by 50% must be verified by a third party. The homeowner can cut through the hype of an “energy efficient home” by simply asking to see the Department of Energy’s certification and proof they are receiving the $2,000.00 from the Federal government. The new home buyer will obviously be main beneficiary of having their heating and cooling costs cut 50%.
MAKE NO MISTAKE
The federal tax rebates combined with Florida rebates, utility rebates and/or credits, benefits result in immediate POSITIVE CASH FLOW for homeowners and especially new homebuyers. If you do not take advantage of these programs you loose big time money, you have left on the table tax credits and cash incentives that were available to you.
SEE www.ecs-solar.com or call us at 352-377-8866 for more information
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