Federal tax credits for energy efficiency can mean savings

As your cooling system ages, it can lose its ability to cool your home. And, not only does it become less efficient keeping your home at the desired temperature, an outdated system can take an increasing toll on your energy bill.

Homeowners are quickly learning that today's new central air-conditioning systems are more affordable due to federal tax credits, energy rebates and more, and provide other benefits, as well. They are also:

• More environmentally friendly because they use less energy;

• Less expensive to operate due to lower energy use;

• Provide additional savings through utility rebates, and

• May be eligible for federal tax credits made available through the American Recovery and Reinvestment Act of 2009.

Federal law now requires a minimum Seasonal Energy Efficiency Ratio of 13 for all new central air conditioning systems. SEER measures equipment energy efficiency over the entire cooling season. Central air conditioning systems are available in a variety of SEERs, and many people purchase new units with the minimum SEER rating.

But, just replacing an outdated system with a new one does not ensure you are maximizing all the savings possible. Higher SEER units are justified by longer cooling seasons, which are typical in Florida; higher electricity costs and the longer the purchasers will own the systems.

"Our customers have realized substantial savings when replacing their inefficient systems," said Mike Hendershott, regional sales manager for Home-Tech, "and in many cases, the new systems have higher SEER ratings than expected, yet ultimately cost the customer less money."

Tom Sprenger, a resident in Estero, was considering a four-ton, 16 SEER replacement unit for his home, with an $805 rebate available from Florida Power and Light. Based on recommendations by Home-Tech, he upgraded to an 18 SEER system, and ultimately paid $1,055 less, despite the higher price tag. The additional savings were due to a federal tax credit of $1,500, and an increased FPL rebate of $1,200. And, those savings do not include the annual energy savings he will realize as compared to operating his old 10 SEER system. According to FPL estimates, the new system will save approximately $710 annually in cooling costs.

Since the system has an average system life of 10 to12 years, Mr. Sprenger's savings could more than pay for the purchase of his new system.

"Many people do not know rebates are available from utility companies, or they purchase units that do not offer tax credits, and spend more than necessary," Mr. Hendershott said. Federal tax credits are available at 30 percent of the cost of cooling systems , up to $1,500. "Our technicians are concerned with helping the customer find the best value possible when replacing a central air conditioning system."