President Obama’s new energy efficiency tax credits have been expanded for 2009-2010.  For example, previous per-appliance caps for HVAC systems, which kept them at $300 or less, have been removed.  HVAC is an acronym that commonly stands for Heating, Ventilation, and Air-Conditioning.  If you are considering upgrading your residential HVAC system, this is your year.

Keep in mind that not all Energy Star rated HVAC appliances are tax credit worthy.  The beauty of buying Energy Star HVAC products is that they lower your energy bills.  Even without the ARRA tax credit, an Energy Star HVAC will pay you back in a practical amount of time.  Do a bit of research about HVAC systems before you choose one.  If you want to take advantage of the tax incentive, make sure the HVAC system you install is eligible for the tax credit before you buy.

Homeowners are now eligible for up to a $1,500 tax credit for qualified home improvements.  In fact, homeowners that previously claimed credits in 2006-2007 are still eligible for the entire $1,500 limit.  The time frame for this tax credit is January 1, 2009 to December 31, 2010.  All purchases and installation must take place within this two year span to qualify for the credit.

What HVAC appliances does the Tax Credit cover?

There are five categories of HVAC appliances included in the tax credit legislation.  To qualify, you must have your equipment installed by a certified technician.  A bonus is that installation cost, not just the purchase price, is also included in the tax credit.

1. Advanced Main Air Circulating Fan.  Main air circulating fans are part of the “V” in HVAC.  It is an efficient fan or blower motor that sends hot air from your furnace through your duct system.  To qualify, the fan must use 2% or less of the furnace’s total energy.

2. Air Source Heat Pumps.  Heat pumps are an energy efficient alternative to furnaces.  Air source heat pumps are most effective in moderate climates.  Heat pumps use electricity to move heat from cooler spaces to warmer spaces, rather than generate heat.  During the heating season, warm air is brought in from outside to warm the home.  During the cooling season, warm air from inside the home is moved outside.

3. Central Air Conditioning.  Not all of central air applicances qualify for the ARRA tax incentive.  There is a lot of variety in central air conditioning units.  Ask your HVAC contractor about the types of central air that qualify for the tax credit.

4. Natural Gas, Propane, or Oil powered Hot Water Boilers.  Boilers heat water and circulate that hot water through your home.  Boiler systems use a system of baseboard heating units, radiant tubing installed in the floors, and radiators.

5. Natural Gas or Propane Furnace.  Furnaces generate heat using fuel and air combustion.  The heat is circulated through the ventilation system using an advanced main air circulating fan.  Though gas and propane furnaces qualify for the tax credit, furnaces are overall the least energy efficient.

Make sure to talk to an HVAC contractor or two before you make any final decisions.  Your best choice for an HVAC upgrade will depend on your local climate, your budget and the size of your home.  A good contractor will help you assess the size and layout of your home to optimize your HVAC renovation.

Hot water is among the top energy consumers in American households.  Solar energy can help bring this cost down.  With today’s advanced technology and energy efficiency tax breaks, going solar is more cost effective than ever. Installing a stand alone solar water heating system can totally eliminate your gas or electric consumption for hot water.  The prospect of free fuel is a tempting one.  These days, that prospect is more realistic than ever.

Doing The Math

A stand-alone solar water heating system could replace a conventional electric hot water heater that uses about 15 kilowatt hours of energy per day. Putting a solar heater on your roof offsets about 15 kilowatt hours worth of energy per day from other sources.  This translates into a savings of 450 kilowatt hours of energy every month on your water heater alone.  The average cost of energy in the US, as of April 2009, was $.12 per kilowatt hour.  A solar water heater can save you up to $54 per month, or $648 per year.  Imagine how quickly your solar water heater will pay for itself.

Pros and Cons of Solar Water Heaters

There are many options to consider with solar water heating.  As a general rule, the higher the upfront cost of a solar water heater, the greater the long-term savings.  Also, a solar water heating system has an average lifespan of 20 years.  This is almost three times longer than a conventional electric or gas powered water heater.  You will replace your conventional water heater 2 or 3 times before you need a new solar water heater.

How Solar Water Heaters Work

Solar water heaters have two main parts: the collector and the circulation system.  The collector gathers the solar energy and coverts it to heat energy for the water.  The circulation system stores the hot water and delivers it to your tap.  The collectors and the circulation systems exist in several combinations.  Use the following basic facts to start your research.

Three types of collector

1.Batch Collectors.  Batch collectors heat water in a dark tank inside of an insulated box.  Water is stored in the collector until you need it.  If demand is low, water can become very hot.  So hot that you may need to install a damper valve to prevent scalding at the tap.  Batch collectors are the simplest solar water heater systems, ideal for warmer climates.

2.Flat Plate Collectors.  Flat plate collectors are usually made out of a series of small copper tubes fitted underneath flat absorber plates.  The flat plate is protected in an insulated box and covered with tempered glass, to extract as much solar energy as possible.  The average flat plate collector holds about 40 gallons of water.

3.Evacuated Tube Collectors.  Evacuated tube collectors are the most efficient.  They consist of glass or metal tubes that contain the water or a heat transfer liquid.  These tubes are surrounded by larger glass tubes.  The space between the inner tube and the outer tube is a vacuum, providing excellent insulation against heat loss.  Evacuated tube collectors are effective in even the coldest weather as long as they can get light.

Four Types of Circulation Systems

1.Direct.  Direct circulation systems are simplest and most common in climates that do not experience much freezing.  Water is usually heated in the collector itself then stored in a tank or delivered directly from the collector to the your tap.

2.Indirect.  Indirect, or Closed-loop circulation systems are better for colder climates, where freezing is more common.  They use and anti-freezing liquid to transfer the heat from the sun to the water, which stays in storage tanks.

3.Active.  Active circulation systems use electric pumps to move the water from the collectors to a storage tank, then to your tap.

4.Passive.  Passive circulation systems use convection to move water to a storage tank as it heats up.  No pumps are required.

The sun’s cheap, renewable energy is good for the environment and good for your bank account.  Going solar has a bigger upfront cost than staying with power station electricity or natural gas.  But after set up, the fuel is free and the solar water heater will last three times longer than a conventional water heater. With the right tax credits and the right installation company, solar power pays for itself in about five years. If you are a homeowner, that is no time at all.  After this time, your hot water will essentially be free, produced on your premises.