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Why Going Green in a Blue Economy Can Be a
Smart Investment
While the real estate market is slow and high energy prices
are challenging everything from the way we heat our homes to the
way we get around, it might make sense to bring a green approach
to a tough economic environment.
If you want to save money with energy-conscious moves inside
and outside the house, replace your current automobile with a
hybrid, or add some greener features to your existing home to
make it more attractive for sale when times improve, why not
check these options:
Hybrid automobiles. While 2008 models of the Toyota
Prius — probably the best-known gas/electric hybrid automobile
on the market — no longer provides a tax credit, there are still
a number of foreign and domestic hybrid models that do. For
those models and their credit amounts, go to the IRS Web site at
http://www.irs.gov/irs/article/0,,id=176409,00.html.
Residential energy credits. A bill is currently before
the U.S. Senate to renew or revise many of the tax credits
offered to taxpayers in tax year 2007. Be on the lookout for any
news of passage on this bill, and use the following tax year
2007 credits as a point of reference:
- Exterior windows
(regular and storm) and skylights: Up to 10 percent of cost
or $200.
- Exterior doors
(including storm doors): Up to 10 percent of cost up to
$500.
- Metal roofs: Up
to 10 percent of cost up to $500.
- Home insulation
that meets current International Energy Conservation Code (IECC)
requirements: Up to 10 percent of cost up to $500.
- Qualified heating
and air conditioning systems as well as heat pumps: Up to
$200.
- Qualified gas,
oil, propane furnaces or hot water boilers: Up to $150.
- Qualified
circulating fans: Up to $50.
- Qualified gas,
oil or propane water heaters as well as heat pump water
heaters: Up to $300.
- Qualified Solar
Energy Water Heaters as well as photovoltaic systems that
provide electricity for the residence: Up to 30 percent of
the cost or $2,000.
- Qualified fuel
cells (natural gas-propelled generators): 30 percent of the
cost up to $1,000 per kilowatt of power that can be
produced.
Try compact fluorescent bulbs. While you may have to
do a bit of comparison shopping to find the best bulbs for the
light you need, check out compact fluorescent bulbs (CFLs) which
are coming down a bit in price ($2-$3 per bulb in 2007 compared
to $9-$25 in 1999) and improving in quality. A typical
incandescent bulb lasts 1,000 hours, while a CFL lasts 3,000
hours on average, according to Consumer Reports.
Get a programmable thermostat. During work or other
hours in the day when you're away from home get a thermostat
that you can program to raise and lower the temperature of your
home to cut your heating and cooling bills. (Obviously keep
temperatures livable for pets while you're away.)
Adjust your water heater. A simple lowering of the
thermostat on your hot water heater from 145 to 120 degrees
isn't going to be very noticeable, and it could save you more
than $20 a year on a gas heater and $50 a year on an electric
one.
Change the way you drive. Driving slower can improve
the mileage on any car, so stay at the speed limit. If you have
to idle for a lengthy amount of time at a train crossing or in a
holding area to pick up someone in the airport, turn off the
engine until it's time to go. Lastly, do a better job planning
the use of your car — try to work necessary errands into a
commute so you won't have to drive as much after work or on
weekends. And if you have teens driving alone, tell them they
have to practice the same behavior if they want car privileges —
do an odometer check if you have to.
Do alternate transportation one or more days a week.
If you have the ability to walk, bike, carpool or take public
transportation to work or for after-work transportation, make a
commitment to do it at least once a week. It will not only save
you money, but the exercise options may help you improve your
health and possibly lower the costs of your health insurance and
doctors' fees related to fitness-based health issues.
May 2008 — This column is produced by the Financial
Planning Association, the membership organization for the
financial planning community, and is provided by Don McCarty of
Financial Decision Partners, a local member of the FPA.
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