Insights & Advice


Going Green Makes Dollars and Sense

Every day is Earth Day as far as the government is concerned, at least when it comes to converting America’s homesteads to green power. Energy efficiency makes sense from a bottom line point of view, whether you are a millionaire or just one of us working stiffs. Here’s why.

Both the Federal government and the Massachusetts State government have combined to offer all of us generous tax incentives and tax credits to convert a long list of inefficient energy items from roofs to the boilers in our basements to energy efficiency. Rarely do we get the opportunity to do something that is socially responsible for the environment and at the same time profit from it personally. And I’m not just talking about the tax savings either.

Did you know that 3% of our national energy consumption is used for drinking water and wastewater services? If one out of every 100 American homes retrofitted with water-efficient fixtures, we could save 100 million KWh of electricity per year and avoid adding 80,000 tons of greenhouse gas into the atmosphere.

Energy retrofitting is a much bigger movement than you imagine. By increasing the efficiency of the nation’s homes and businesses we can reduce energy consumption by up to 40% per home and reduce the nation’s energy outlay by $21 billion each year. Just in upgrading heating appliances alone, consumers can save $10 billion and prevent 164 million metric tons of carbon dioxide emissions over 30 years. Just this month the energy department increased standards for a key group of heating appliances including residential water heaters, pool heaters and direct heating equipment such as gas fireplaces. These new standards alone will reduce air pollution equivalent to taking 46 million cars off the road for one year.

Last year’s economic stimulus package revived, expanded and built upon many energy-efficient home improvement tax breaks that expired in 2007. The non-business energy property tax credit, for example, provides a credit of 30% for the cost on new insulation, energy efficient windows, doors, furnaces, air conditioners, appliances, heat pumps, water heaters and boilers, up to a maximum of $1,500. However, you would need to spend at least $5,000 on qualified energy-efficient home improvements to claim the full credit.
There is also the residential energy-efficient property tax credit, which covers more ambitious projects such as solar electricity, water heaters, geothermal heat pumps and wind energy products. This tax credit covers 30% of the cost with no maximum. The credit is good through 2016 as well.

Remember too that these Federal programs are in addition to state and local incentives and Massachusetts is ahead of the curve when it comes to energy efficiency incentives. If you would like to discover what programs are available to you, contact MASS SAVE (, which is an energy resource organization consisting of the state’s utilities, energy efficiency service providers and state organizations that provide a wide range of services, incentives, training and information to promote energy efficiency.

Even closer to home is the Center for Ecological Technology (CET), the Pittsfield-based, non-profit organization that carries out most of Mass Save’s energy services in western Massachusetts. Besides furnishing you a wealth of information and guiding you through the various incentives, CET conducts energy audits for over 5,000 homes a year in this area, which is something every household should consider as a first step toward going green.

And don’t forget the electric car tax credit which offers taxpayers up to $7,500 towards the purchase of a plug-in electric-drive vehicle. So if you have a hankering to be first on your block to buy one of GM’s Volts when they officially launched this year, the tax credit will help reduce what is expected to be a high price tag for the American-made plug-in.

All in all, the impact of that first Earth Day twenty-five years ago has been truly impressive. I remember attending that celebration in Philadelphia’s Fairmount Park along with 20,000 other early environmentalists back in 1970. Back in the day, we were worrying about the fate of America’s much-polluted Great Lakes and the harmful effects of spraying DDT all over anything that vaguely resembled an insect.

Although some of the more dire predictions of those times, like Life Magazine’s warnings that “By 1985, air pollution will have reduced the amount of sunlight reaching earth by one half” failed to materialize, I believe without this historical event we might not have an Environmental Protect Agency and its equivalent organizations in all of our states. The Great Lakes are still here. The lightning bugs and Bald Eagle are back. And air quality today in the United States is better than ever before with air pollution declines of between 40% and 92 % since 1980, but we still have a long way to go in every area of the environment.
The big difference between then and now is that our government is a willing partner in the Greening of America. It is putting its money on the line and you should too. Celebrate Earth Day this year by arranging for an energy audit of your house and then take advantage of the energy incentives. It’s the most sensible way I know to cut your living costs in these tough times and insure your grandkids still have a planet to live on.

Posted in Financial Planning, The Retired Advisor