With each passing year there’s more focus on how we can increase energy efficiency and decrease energy demand. In 2023 we’re likely to see a lot of investment in energy reducing improvements for a variety of reasons. Right now there’s a perfect alignment of technology, consumer demand and government assistance.
Let’s take a look at which energy reducing improvements more people will be considering in the coming year.
Get Federal Tax Credits for Energy Efficiency Improvements
Let’s start by discussing why energy reducing improvements will be at the top of the list for many homeowners in the coming years. Big news for 2023 is that the Energy Efficiency Home Improvement Tax Credit was extended.
But extending the credit all the way out to 2032 wasn’t the only change. The federal government is also allowing the credit to be used for more products as well as energy audits, and the credit amount is higher than in years past. Instead of getting a 10% tax credit, which was the case in 2022, homeowners now get a 30% tax credit on qualifying energy efficiency improvements.
In addition to a big jump up in the credit amount, there are no longer lifetime limits on the credit that can be received, and the annual limits went from $300 max for any single item to $600. Whatsmore is that the federal government is allowing people to claim the tax for improvements made to secondary homes.
In other words, 2023 is a great time to make an investment in energy efficiency improvements because the upfront costs will be lower. Pick anything on the approved list for the Energy Efficiency Home Improvement Tax Credit and you’ll reap the rewards.
Solar Installations Will Be Much More Common
With the added incentives in place, big ticket improvements that are more of an upfront investment will be more likely simply because the cost is lower. Solar panel installations are the perfect example of this. Paired with more efficient panels, more households are likely to go solar in 2023.
The Solar Energy Industries Association (SEIA) has estimated that between 2023 and 2027 solar generation will increase by 21% year-over-year. Bloomberg Intelligence forecasts that solar demand will grow by 20-30% in 2023 alone.
Something else worth considering is the value a solar installation adds to a home. Real estate markets have cooled off, which means if you have to sell your home, features like a solar panel installation can help attract buyers.
Another thing working in favor of solar installations is inflation appears to be slowing and supply chain issues that have hindered installations are being resolved.
Replace Older HVAC Systems With ENERGY STAR Models
Another big investment that more homeowners may want to make while there’s a 30% credit is replacing an older HVAC system. The average lifespan of an HVAC system is around 15 years depending on the type of equipment. As the system ages and components wear out the efficiency goes down.
Given that heating and cooling a home is the biggest energy use, inefficiency is a bad thing. Especially considering that the summers are getting hotter.
If you’re replacing an older HVAC system you can double up the benefits by opting for an ENERGY STAR model. HVAC systems that earn the ENERGY STAR designation have proven to be more energy efficient than an average system without sacrificing performance or quality. Your home will be more comfortable and you’ll use less energy without changing how you use your HVAC system.
Expanding Insulation All Around the House
There’s no denying that weather events are getting more extreme as is the temperature. It’s not uncommon to have record lows in winter and a few months later have record highs at the beginning of summer.
Insulation is going to play a key role in keeping homes comfortable without relying even more on HVAC systems. Already there are insulation products for the attic, seams, around pipes, at outlets and within the walls. The more insulation is added around the house the better natural temperature regulation will be so the cold stays out in the winter and the heat doesn’t get in during the summer.
One of the best things about insulation is it’s an investment that usually has a dollar for dollar return. Another advantage is that insulating products are getting more efficient.
Making the Switch to an Instant Water Heater
Water heaters use more energy than any other appliance in the house. When you consider that the water heater is constantly running and has to heat up a lot of water, it’s perfectly reasonable that the water heater accounts for about 12% of the energy bill.
If you have an electric water heater you can save a lot of energy every month by switching to a tankless water heater. On top of getting hot water out of the tap much faster, an instantaneous water heater only uses 12 kWh of power a month. Fall the other water heater efficiency best practices and it’s an energy reducing improvement that you’ll notice on your monthly bill.
The coming year is also a great time to make the switch to a green energy plan that you can feel good about. Verde Energy plans are powered by renewable resources that are transforming the way we live for the better. Use your zip code to find available plans in your neighborhood.