Tax credits give Chicago homeowners incentive to reduce energy costs
Chicago area homeowners wanting to save money on their energy bills but who balk at the cost of installing energy-efficient equipment may want to reconsider. The Energy Policy Act of 2005 allows homeowners of existing and new construction homes a federal tax credit for up to 30 percent of the cost for several products through 2016.
- Solar panels. Also known as photovoltaic cells, the most effective solar panels can supply between 40 percent and 80 percent of a home’s electricity needs. Installation costs can be kept down when the panels are installed on new homes, but installation costs can rise as high as $200,000 for conversions in existing homes.
- Solar water heaters. Though they look similar to traditional tank heaters, solar water heaters run on the sun’s energy rather than gas or electricity from the grid. The typical cost of a solar water heater ranges from $1,000 to $3,500.
- Geothermal heat pumps. Similar in appearance to a traditional air conditioning unit, geothermal heat pumps transfer air between the home and the ground by pumping heat through a series of pipes. The pumps range in price from $10,000 to $25,000 but they may qualify for federal tax credits and utility company rebates.
- Small wind energy systems. The Windy City may actually be the perfect place for a residential system connected to the public utility grid. A unit can supply electricity for light, appliances and heat. Depending on how much energy it collects, you could even earn money by selling surpluses to the public utility.