Energy efficiency programs offered by utilities

Energy efficiency measures deliver positive environmental impacts, reduce your reliance on utility-generated electricity, and provide more jobs than the coal or upstream oil & gas sectors in the United States. To encourage energy efficiency, governments, utilities, and other organizations offer energy efficiency and other financial incentives to make energy efficiency more accessible for today’s homes and businesses. 

Utilities, local governments, and state agencies offer energy incentive programs that help make energy efficiency a more affordable option. Depending on your state or municipality, programs can take the form of rebates, tax incentives, or loans for qualified purchases.

While specifics vary from program to program, savings categories frequently include financial incentives for HVAC systems, water heaters, building insulation, appliances, weatherization, lighting, and other energy-efficient improvements. Before you make an energy-efficient purchase, visit the Department of Energy (DOE) website to search their database of energy efficiency tax credits, rebates, and savings available at the local and state level.

You should also use the Database of State Incentives for Renewables & Efficiency (DSIRE), which provides detailed information on state incentives and policies for renewable energy and energy efficiency improvements. With DSIRE, you can further narrow your search with an extensive list of filters that allow you to differentiate between various renewable and energy-efficiency technologies. Other useful filters that are not available on the DOE database include dates, categories, program types, and coverage areas.

ENERGY STAR rebates

Local utilities often provide rebates for ENERGY STAR-certified or energy-efficient purchases, which cover a wide range of appliances, building products, electronics, heating and cooling equipment, lighting, fans, pool pumps, and water heaters. With rebates, you receive the returned portion of the purchase price after you pay the full amount, as opposed to a discount that reduces the price prior to the purchase.

The timing of when you will receive your rebate differs according to the product, as well as the program structure in your area. Some rebates are available immediately after purchases, whereas others are available only after the installation has been completed. The total rebate amount also depends on the product, going as low as $10 for CFL lightbulbs or up to around $1,000 for larger equipment. You can find available rebates using the DOE database of energy efficiency tax credits, rebates, and savings. Enter "rebate" as the keyword and search by state, eligibility, and product category. The DSIRE database will also have information on state- and utility-level incentives.

Tax incentives for energy efficiency

Federal tax credits for energy efficiency expired at the end of 2016, which means that tax incentives for energy efficiency are hard to find. Nevertheless, you can still receive federal tax credits if you have made energy efficiency improvements in prior years. For instance, improvements related to the building envelope, heating, cooling, and water heating qualify if they were made in 2015 or 2016. For ENERGY STAR-qualified windows, doors, and skylights, tax credits are available for installations between 2012 and 2016. To claim these residential energy credits, file Form 5695 with your taxes.

The only environmentally-focused federal income tax credits that are still available are for solar energy systems and all-electric or plug-in hybrid vehicles. However, you can look for energy efficiency tax incentives that may exist at the state or local level. In many states, agencies offer financial incentives in the form of sales or property tax exemptions for purchasing or installing qualifying equipment.

You can search for available tax incentives using the DOE database of energy efficiency tax credits, rebates, and savings. Enter "tax" as the keyword and search by state, eligibility, and product category. You can also use the DSIRE database to search for state-level incentives.

Energy efficiency loans

Homeowners interested in investing in energy efficiency are usually discouraged by the high upfront costs of equipment and installation. To combat this problem, various agencies ranging from utilities, energy service companies, and local and state governments offer loans specifically for energy-efficient installations. 

To acquire an energy efficiency loan, you must submit an application to the loan program you have in mind. Loan programs for residential energy efficiency can be limited to specific products, or they may mandate a minimum percentage for overall energy savings.  The eligibility criteria for an energy-related loan also vary according to the program. The most essential requirement is often a healthy credit score. Loan programs may also require you to schedule or perform a home energy audit.

There is considerable variance in the total amount and the interest rate at which you can borrow, so be sure to thoroughly research your options before settling on a certain program. Contact your state energy office to find out whether subsidized energy efficiency loans are available in your area. A list of state energy offices is available below.