Today, while reading in an interview in a HVACr trade journal, I read a quote that summed up an important point:
It’s not about the box, it IS about the whole house
In this case, the “box” is the new AC and heating equipment you are thinking about having installed. And the whole house (actually the part HVAC insiders call “the envelope”) interacts with the outside elements to determine how comfortable you are inside, how hard your AC and heating equipment has to work, and how much you pay (or save) each month in utility bills.
Here’s a real life example from a reader who sent an email to us recently.
This fellow lives in the northeast U.S., and was quite surprised when his local AC contractor discouraged him from buying the top of the line, most efficient system. Rather, the contractor advised him go for the 16 SEER A/C unit, and to take the extra $2,000 the most efficient AC was going to cost and use that to add insulation to his attic and seal up leaky walls and electrical outlets. Although the summer cooling needs of this northeastern state are lower than central Texas where we are, the same principle applies everywhere:
For each home or building and its climate, there is an optimum mix of heating or cooling efficiency attributes and energy efficiency improvements that could be done to the “envelope” that interacts with the outside air.
Since you only buy an new AC and heating system every decade or so, you don’t have to know everything about this topic. Your best bet is to be aware of the big picture and ask the right questions. This way you will find a local contractor who uses best practices (training, certifications, experience & business practices) and takes the “whole house” approach.
Let us hear from you if you have experiences to share along these lines
As a provision of the American Recovery and Reinvestment Act of 2009, homeowners can now receive up to $1,500 in tax credits when they install qualifying high-efficiency heating and ACA equipment into an existing home.
Difference in a tax credit and tax deduction
Before going further, we will point out that this is a tax credit, not merely a deduction. Basically, a deduction reduces the amount your tax bill is calculated from. A tax credit offsets the amount of taxes you owe. In all cases, talk to your tax advisor before taking action.
The act allows 30% of the amount invested for qualifying equipment and during specific dates in calendar 2009 and 2010, up to a maximum credit of $1,500. This means that qualifying expenditures can be up to $5,000. Although the focus in our blog is on HVAC equipment, the total credit also applies to certain types of energy efficient windows, doors, insulation, solar water heaters and other energy saving items. At the risk of belaboring the point, one credit covers all these categories, not one credit per category.
Special provisions for geothermal heat pumps
If you are considering a geothermal heat pump (or solar water heater) we are hearing that there are some extra stimulus incentives, including higher allowances and more years to qualify.Â Ask your tax adviser and contractor for the details.
Get the details in writing
In reading air conditioning and heating industry news and blogs, there is some confusion over which replacement equipment qualifies (or which efficiency standard to rely upon) for the efficiency standards of the act. This is not unusual for the early stages of a new tax credit and the complexities of the U.S. tax code. Because of this, we advise you to get the details in writing from your contractor or tax advisor as to whether (or not) any purchase you are considering qualifies for the tax credit.
Our wish is that you enjoy more comfort, lower energy usage, and lower monthly bills.