Over the past year, Congress has been looking to implement a program (in addition to the tax credit program) which would offer rebates to those who undertake energy efficiency projects on one’s home.  This program legislation has stalled in the Senate, after passing the House in May, as no substantial progress has been achieved.  Not wanting to wait for Congress, Delaware has moved ahead and has recently instituted its own new rebate program for home energy upgrades.  This program, modeled on the stalled federal legislation (Home Star a.k.a. Cash for Caulkers), looks to meet the following objectives:  to help homeowners save money, improve the environment, and generate construction jobs.

With this new rebate program in place, there are currently two programs which provide incentives to Delaware homeowners to perform energy efficiency upgrades to one’s home.  The first program is the Residential Energy Credit.  This program offers a 30% tax credit, up to a maximum of $1,500 for most energy efficiency improvements, which is eligible be claimed on an individual’s 2009 and 2010 federal tax returns (please note only $1,500 worth of credits can be claimed for 2009 and 2010 combined).

The second program is the newly implemented “Cash for Caulkers” program.  This program, which is primarily being funded by last year’s economic stimulus package, could provide rebates ranging from $300 to upwards of $8,000 depending on the path taken in the program.  So how would one go about participating in this rebate program?

The first and most important step is to determine if you are in fact eligible to participate in this program.  To be eligible, the owner’s home must be a detached or attached (i.e. duplex or townhome) single-family owner occupied residence.  New construction, multifamily units, and commercial properties are not eligible to participate in this program.  After determining eligibility, participation in the program is as easy as completing this five-step process:

1.)    Contact an approved contractor (approved contractors can be found by visiting Energize Delaware’s website) to learn more about the program and to schedule a Home Energy Audit.

2.)    Review the audit findings and energy-saving recommendations with your contractor.  In this step it should be decided which path you would like to take: the Standard or the Performance Path.

  1. Standard Path – This path provides rebates on specific equipment installations (i.e. if you re-do wall insulation you can receive a rebate of up to $400 or if you replace exterior doors you can receive a rebate of up to $50).  For measures in the Standard path, you can recover 20% of the cost or the set rebate amount, whichever is less.  The total rebate paid to a customer is capped at $1,800 for efficiency measures enacted using the Standard Path.
  2. Performance Path – This path provides rebates based on a home’s total energy reduction.  After implementation of the home efficiency measures, if the home achieves a 20% energy reduction, the rebate amount will be $3,000.  For each additional 5% reduction after the baseline, the rebate will increase by $1,000 (25% reduction – $4,000, 30% reduction – $5,000, etc.) capping at an $8,000 rebate for achieving 45% energy reduction.  The total rebate is capped at 50% of total installed cost or the incentive amount for the given level, whichever is less.  (For example, if you achieved 45% energy reduction and spent $20,000, you would receive the full $8,000 rebate.  However, if you were able to achieve the same 45% reduction by only spending $10,000, you would only receive a $5,000 rebate.)

3.)    Sign a contract with the contractor (to perform the improvements).  The contractor will then submit the application with the signed contract to begin the rebate process with Energize Delaware.

4.)    The contractor will then implement the agreed upon energy improvements, perform final tests, and close out the job.  You should receive a signed certificate of completion and it is at this time that the payment will be due.

5.)    Submit the final application to Energize Delaware and your rebate check should arrive within 6 to 8 weeks.

In the hopes of spurring the economy the government has created some opportunities for individuals to take advantage of.  For those who were already leaning toward home efficiency improvements now is the time to act.  Not only will you decrease monthly bills due to the improved efficiency, but the government will offset some of the cost of these improvements as well.  What a great opportunity!

If you have any questions or would like more information, please contact:

Andrew Johnson

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