With winter on its way, furnaces all over the Northeast are firing up. Now is the time to think about how you can lessen the financial and environmental impact of what will surely be a cold five- to six-month heating season.
For Pennsylvania residents, this is especially important this year. Home heating and cooling costs are very likely going to rise, because the electrical generation rate caps, put in place in 1997, are expiring December 31, 2010. Even if you have a propane or natural gas furnace, the non-variable speed fans/blowers found on older units consume a considerable amount of electrical energy to distribute the heated air throughout the home.
In spite of the looming utility rate increases and the onset of winter 2011, you may actually be able to reduce your gas and/or electric bills to lower levels than in previous years. Here are some ideas to help you do it:
1. Install a programmable thermostat: Following simple instructions, the average homeowner can purchase, install and program a programmable thermostat. Most models offer 7-day programming with several time zones per day, allowing the homeowner to set different temperatures for different times of the day (wake-up, off-to-work, back home, bed time). These set-back periods ultimately reduce the gas and electrical utilities consumed by one’s heating and cooling system, thus lowering the operating cost. An ENERGY STAR® programmable thermostat can reduce energy usage by as much as 16%, and some utility companies are even offering rebate programs that practically cover the cost of the thermostat.
Math: $40 (less rebate) + 1 hour of time = $$$ in your pocket
2. Re-caulk your windows and doors: Yes, you’ve heard this one before…because it works! Over time, caulk can shrink and pull away from surfaces, thus diminishing its ability to seal windows and doors from energy-robbing drafts. With a few common tools, materials and a little time and know-how, the average homeowner can easily reduce drafts and improve the efficiency of his/her home.
Math: $20-$40 in caulk + 2 to 4 hours of time = $$$ in your pocket
3. Install insulating window film: Yep, I’m referring to that clear plastic film that installs on the inside of your windows and shrinks when heated with a hair dryer. I installed this virtually invisible film on the windows of my home last weekend, in about 3 hours, for less than $15. The result was a clear, energy-saving film that, to quote my wife, “immediately knocked the chill off the windows.” It really works to seal drafty windows and reduce energy consumption.
Math: $15-$50 + 3 to 5 hours of time = $$$ in your pocket
4. Replace your low-efficiency furnace/heat-pump and/or air-conditioner: While the one-time costs are rather significant, the payoff can be worthwhile, depending on your circumstances. Replacing a low-efficiency furnace with a high-efficiency model can pay for itself over time. Until December 31, 2010, the federal government is even offering a tax credit of up to $1,500 to homeowners who replace/install high-efficiency furnaces/heat-pumps and/or air-conditioners (just be sure to check qualifying requirements). Since I plan to be in my home for several years, and because my 30-year old furnace was on its last leg, I recently bit the bullet and did this one, too. According to my HVAC vendor, I can expect to see my gas and electric bills drop by as much as 40%. The $1,500 tax credit definitely made that decision easier, but with a December 31, 2010 deadline, time is running out on that program…tick…tick…tick. Most HVAC contractors can review your requirement, propose a solution and install a new system in a matter of a few days.
5. Some other energy-saving ideas can be found here.
Hopefully you will find this information to be helpful and you too can save energy and money, and, most importantly, stay warm this winter.
Schneider Downs provides accounting, tax, wealth management, technology and business advisory services through innovative thought leaders who deliver the expertise to meet the individual needs of each client. Our offices are located in Pittsburgh, PA and Columbus, OH.
This advice is not intended or written to be used for, and it cannot be used for, the purpose of avoiding any federal tax penalties that may be imposed, or for promoting, marketing or recommending to another person, any tax-related matter.