As a follow-up to the popularity of the “Cash for Clunkers” program, the federal government recently launched the Cash for Caulkers program as an incentive for homeowners to fix or update their homes for increased energy efficiency.  This program offers a 30% tax credit, up to $1500 per household, on the cost of (in most cases, only) the materials needed to make the fix, not the entire cost of the project.  As most of us know, labor costs account for a large portion of any home maintenance or remodeling project.  So, while the cause is noble, there are certainly some major limits for most homeowners.

Let’s take the issue of caulk, the namesake of the program.  Almost any home can be re-caulked with a case of caulking which can be purchased for about $100.  That’s about a $30 tax credit.  Yet if you wanted to hire someone to take care of the project for you, regardless of the labor cost, you’re still only looking at a $30 tax credit even though you may have spent hundreds of dollars for labor.  We’re not completely criticizing the program here, but this example shows the limitations homeowners will face that they may not be aware of.

Below is a breakdown of what the 30% tax credit (again, up to $1500 per household) can be used for.  These items do not include installation costs and are only included if they meet the efficiency standards set forth by the IRS:

• Windows, doors, skylights, and some storm windows and doors
• Insulation
• Caulking
• Weather Stripping
• Some metal and special heat reflecting asphalt shingles

There are, however, some high ticket items for which installation costs are included:

• Traditional, highly efficient HVAC systems that meet the energy requirements

And more, even higher ticket items which have no limit on the 30% tax credit:

• Geothermal heat pumps
• Wind turbines for residential use
• Solar hot water heaters
• Solar panels

If it costs you, say, $30,000 for one of these expensive items, you get a tax credit of $9,000.  The catch is that you have to be able to afford the $30,000 item in the first place - something most homeowners, especially in this economy, aren’t going to be able to do.  Perhaps I’m in a cynical mood, but it seems to me that people with money (who can afford such things in the first place) will benefit, whereas the average homeowner may just be able to save a few bucks if he buys his own caulking and installs it himself.

There is one exception, and the best deal for homeowners right now may be in window replacements.  Many window companies are selling the windows at an increased amount and providing the installation for free.  It’s a matter of just moving the numbers around, but it’s a great way for them to sell more windows and for homeowners to get more of a tax credit while the Cash for Caulkers program is in effect.

Being more energy efficient and going green is always a good thing, and at Riggs we routinely encourage homeowners to incorporate into their projects whatever level of green they can realistically manage and afford.  Saving a few bucks today, and a lot of bucks over the life of the investment is an added bonus.

Tom Green Remodeling, Home Maintenance cash for caulkers, Green Remodeling, Home Maintenance, tax credits

Over the New Year’s weekend the furnace in our office stopped working and it was 37 degrees when I arrived this morning.  I knew it was on its last leg because it shut down last week and I had to do some emergency repairs to get it running again.  The sad fact is I didn’t want to spend the money on a new one; just yet.

It got me to thinking about our clients and what they must feel about the improvements they are making on their homes.  Most of what we do here at Riggs Construction & Design is work with homeowners on voluntary improvements to upgrade their home life and environment but there are a significant number of clients who call us because of something that has to be done.  Things like new shingles on the roof or an HVAC system that is so old they have concerns about it lasting through the winter.  Other concerns we run across are moisture infiltration and rotten exterior trim (sometimes one in the same).  These owners have to spend their hard earned dollars on something that we call, “the un-fun stuff” as opposed to a new bath, kitchen or master suite that they can truly enjoy day after day.

Some of those expensive “un-fun” repairs could have been avoided with a more aggressive maintenance program but life expectancy on shingles, mechanical equipment and other building products have to be taken into account when doing a yearly home budget. I mentioned earlier that I didn’t want to replace the furnace just yet.  Our year ends January 31st and since I didn’t have a new furnace in this year’s budget, I was trying to prolong its life just one more month.  I didn’t do what I say to do and it caught me rather flat footed and red in the face!

We offer a maintenance program to many of our clients that includes a checklist of things we do every six months.  Some are simple, like checking all the caulking around the house and walking the roof for possible damage to shingles and flashing.  Some are more complex like having the mechanical systems serviced but they are all geared toward preventing the “un-fun stuff” and keeping those products with life expectancies in top notch condition to stretch that life as far as possible.  The clients we do this maintenance program with feel that the small cost of yearly checkups is much better than what can happen if the roof leaks or the furnace goes out when it’s 4 degrees outside.

As I write this, our space heaters aren’t working very well to warm up our offices and Schraut Heating & Cooling is downstairs replacing the furnace.  I’m going to print out a copy of the spring and fall checklists that I insist our project managers take with them when they perform the maintenance program on our client’s homes.  Before I finish the 2010 budget, I’ll be going over that checklist on both my office and my home!

Tom Home Maintenance, remodeling