A "green" home may soon be within budget. North Carolina homeowners will be able to take advantage of the same kinds of financial subsidies that have helped residents in other states retrofit their homes with solar panels and other energy-saving devices.
Prodded by public demand, utility companies in this state are beginning to roll out conservation programs to subsidize the cost of "green" upgrades in the home. State regulators this month approved financial incentives to help natural gas customers offset the cost of energy-efficient furnaces and water heaters. Similar incentives are expected to be approved soon for Progress Energy's customers to upgrade to more efficient electric appliances.
By the end of the year, a homeowner in North Carolina will be able to choose from a smorgasbord of financial incentives -- federal, state and local. The money-saving opportunities for customers will increase in coming years as the state's electric utilities respond to a 2007 conservation law and offer more financial incentives.
"If you haven't checked in lately on these things, there is this opportunity for combo incentives where you get anywhere from 30 percent to 50 percent off on these high-dollar [upgrades]," said Stephen Smith, executive director of the Southern Alliance for Clean Energy. "They can be amazing. And as electricity rates continue to creep up, these things will become more and more utilized."
But proceed with caution. Don't rush out today to buy an appliance with a "green" label and expect a financial reward down the road. To qualify for the incentives, homeowners will have to demonstrate that the appliance -- and the contractor who installed it -- meet specific criteria. Some conservation incentives in this state are merely proposed and not approved by the N.C. Utilities Commission. Others have been approved but won't be available to the public until later this year.
The main problem is that the incentives are more complicated than they first appear. Homeowners are advised to make sure they qualify for the subsidies before spending on upgrades, not after.
Air conditioners provide a good case study. Local utilities are offering, or proposing, rebates for central cooling-heating systems with efficiency ratings ranging from SEER 13 to SEER 15. But none of those energy-efficient models might qualify for the $1,500 federal tax credit, because in some cases the federal incentive applies to systems rated SEER 16 and higher.
Then there's the matter of installation of the HVAC systems, water heaters, windows and other upgrades. These aren't do-it-yourself projects -- the terms require licensed contractors to qualify for incentives. Progress Energy will even go further and require customers to select licensed contractors from a pre-approved list.
What it's worth
Calculating the financial benefits also can be a headache. The North Carolina state tax credit counts as taxable income by the IRS. The utility incentives reduce the basis for the federal tax credit, so that the credit on a $1,000 expense with a $100 incentive is only good for $900.
"Consult a tax professional," advises Brian Lips, a policy analyst at the N.C. Solar Center. "I don't know if TurboTax would benefit you very much with this."
Still, for some, the benefits are already paying off.
Tucker Shade of North Raleigh is now showering in water heated by the sun. In years past, a solar water heater would have been a financial write-off that eased a guilty environmental conscience but burned a hole in his household budget too big to ever be recovered through energy savings alone. But Shade estimates that his $7,000 solar water heater will pay for itself in about five to seven years, in large part because federal and state tax credits will cover nearly half the cost of the appliance.
"This is seven grand, and I'll get half that within the first year," Shade said. "Plus the actual reduction in natural gas savings."
