The most profitable energy efficiency investments you can make – and how the new law on cutting inflation could help you


Energy efficiency can save homeowners and renters hundreds of dollars a year, and the new Cut Inflation Act includes a slew of home improvement rebates and tax incentives to help Americans secure these savings.

It extends tax credits for the installation of energy-efficient windows, doors, insulation, water heaters, furnaces, air conditioners or heat pumps, as well as for home energy audits. It also offers rebates for energy efficiency upgrades for low- and middle-income households, up to $14,000 per home.

Together, these incentives aim to reduce energy costs for consumers who use them by $500 to $1,000 per year and reduce the country’s greenhouse gas emissions.

With so many options, what are the most cost-effective moves homeowners and renters can make?

My lab at UMass Lowell works on ways to improve the sustainability of buildings and homes by finding cost-effective design solutions to reduce their energy demand and carbon footprint. There are two main ways to reduce energy consumption: energy-saving upgrades and behavioral change. Each has clear winners.

Stop leaks

The biggest benefit to both saving money and reducing emissions is to weatherize the house to stop leaks. The loss of cool air in the summer and warm air in the winter means that heating and cooling systems work harder, and they are among the most energy-consuming systems in a home.

Gaps along the baseboard where the wall meets the floor and at windows, doors, pipes, fireplace registers and electrical outlets are all prime locations for drafts. Fixing these leaks can reduce a home’s total energy consumption by about 6%, on average, according to our estimates. And it’s cheap, since these fixes mostly involve caulking and weatherstripping.

Common places where homes leak and weatherization measures can save money.
Ministry of Energy

The Inflation Reduction Act offers homeowners a helping hand. It includes a $150 rebate to help pay for a home energy audit that can locate leaks.

Although a professional audit can help, it is not essential – the Department of Energy website has tips for carrying out your own inspection.

Once you find the leaks, the law includes tax credits of 30% with a maximum of $1,200 per year for basic weatherization work, as well as rebates of up to $1,600 for low- and middle-income homeowners earning less than 150% of the local median.

Replace windows

Replacing windows costs more upfront, but can save a lot of money on energy costs. Leaky windows and doors are responsible for 25 to 30 percent of residential heating and cooling costs, according to Department of Energy estimates.

Insulation can also reduce energy losses. But with the exception of poorly insulated older homes and homes that experience temperature extremes, whole-home energy savings aren’t usually as significant as weathering or replacing windows.

The Cut Inflation Act provides up to $600 to help pay for window replacements and $250 to replace an exterior door.

Upgrade appliances, especially HVAC and clothes dryers

Buildings are responsible for approximately 40% of US energy consumption and associated greenhouse gas emissions, with a significant portion in homes. Heating is usually the main energy consumption.

Among appliances, upgrading air conditioners and clothes dryers yields the greatest environmental and financial benefits; however, HVAC systems – heating, ventilation and air conditioning – come with some of the highest upfront costs.

This includes energy-efficient electric heat pumps, which heat and cool a home. The Cut Inflation Act offers a 30% tax credit of up to $2,000 to anyone who buys and installs a heat pump, plus rebates of up to $8,000 for low-income households low or middle earning less than 150% of local median income. . Certain high-efficiency wood stoves are also eligible.

The law also provides rebates for low- and middle-income households for electric ranges up to $840, heat pump water heaters up to $1,750 and heat pump clothes dryers up to $840. .

Change your behavior in a few easy steps

You can also make a big enough difference without federal incentives by changing your habits. My dad was energy efficient before he was fashionable. His “hobby” was turning off the lights. This action itself was among the most economical behavioral changes.

Just turning off the lights for an hour a day can save a home up to $65 a year. Replacing old bulbs with LED lighting also reduces energy consumption. They are more expensive, but they save money on energy costs.

We found that a homeowner could save $265 a year and reduce emissions even further by making a few behavioral changes, including unplugging unused appliances, drying clothes, lowering the water heater temperature, setting the thermostat 1 degree warmer at night in the summer or 1 degree cooler in the winter, turning off the lights for an hour a day, and going without technology for an hour a day.

Some devices are energy vampires – they consume electricity when plugged in even when you’re not using them. A study in northern California found that plugged-in appliances, such as TVs, set-top boxes, computers and smart devices that weren’t being used, were responsible for 23% of electricity consumption in homes. homes.

FILE - In this May 6, 2009 file photo, watt-hour meters track the electricity used by residents of an apartment building in St. Marys, Pa. (AP Photo/J. Scott Applewhite, File)
FILE – In this May 6, 2009 file photo, watt-hour meters track the electricity used by residents of an apartment building in St. Marys, Pa. (AP Photo/J. Scott Applewhite, File)

Start with a passive solar house

If you’re looking for a home to rent or buy, or even build, you can make an even bigger difference by looking at how it’s built and powered.

Passive solar homes take advantage of the local climate and site conditions, such as having many south-facing windows to capture solar energy during cool months to reduce the home’s energy consumption as much as possible. home. Then they meet the remaining power demand with on-site solar power.

Studies show that for homeowners living in cold climates, building a passive design home could reduce their energy costs by 14% compared to an average home. That’s before you take solar panels into account.

The Cut Inflation Act offers a 30% tax credit for rooftop solar and geothermal heating, and accompanying battery storage, as well as incentives for community solar – systems larger solar units with multiple owners. It also includes a $5,000 tax credit for developers to build homes to the Department of Energy’s Zero Energy Ready Homes standard.

The whole energy and climate package – including incentives for large-scale renewables, carbon capture and electric vehicles – could have a big impact on homeowners’ energy costs and on the climate. According to several estimates, it has the potential to reduce US carbon emissions by around 40% by the end of this decade.The conversation

Jasmina Burek is an assistant professor of engineering at UMass Lowell.

This article is republished from The Conversation under a Creative Commons license. Read the original article.


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