As inflation surges nationwide, the burden of everyday expenses such as household repairs and utility payments is steadily climbing, placing Americans in a relentless financial squeeze. Homeowners are now exploring new innovative measures to lower costs.
A recent survey from remodeling firm AllStar Home found around 70% of Americans are performing DIY projects in an effort to cut repair costs. Many are turning to social media tutorials to make it happen.
However, eco-friendly subsidies are another way to save on home improvement projects. Advisors see great potential here.
“With the current focus on green living and the available financial incentives, it’s a win-win situation for homeowners,” says Doug Greenberg, President of Pacific Northwest Advisory. “These upgrades not only add value to your property but also contribute to a sustainable and energy-efficient future.”
There is a solid environmental impetus for change as American households are still big polluters. Currently, powering buildings and homes contributes around 13% of U.S. greenhouse gas emissions, per Environmental Protection Agency estimates.
The government encourages homeowners to embrace green tech with financial incentives, such as rebates and tax breaks for solar panel installations, energy-efficient appliances, and home weatherization services. These kickbacks can also benefit aspiring landlords considering entering the rental property game and ensure they can suppress running costs.
There are a myriad of ways to save while improving homes. Approached strategically, eco-friendly upgrades may pay for themselves.
Americans have been warming up to the idea of solar power. A Pew poll from early 2022 found that 8% of U.S. homeowners have already installed solar panels, while an additional 39% have seriously considered it. That was the public’s view before the 30% federal tax credit came into effect in August 2022, further incentivizing adoption.
“Now is an opportune time to consider solar panels,” says Greenberg. “With federal tax credits still available for homeowners, you can substantially reduce the initial cost of installation. Over time, solar panels can considerably cut down your electricity bills, allowing the system to essentially pay for itself.”
It’s not just about generating power but conserving it, too. Upgrading heating systems and improving insulation can drastically lower energy consumption in homes, slashing energy bills and shrinking the home’s carbon footprint.
“If you’re still using an older heating system, upgrading to a more energy-efficient model can provide substantial savings over time,” says Greenberg. “Consider heat pumps, which are known for their efficiency and can serve dual purposes, both heating in the winter and cooling in the summer.”
Proper insulation makes homes more comfortable, prevents energy wastage, and can add protection during extreme weather events. Air sealing, for instance, including caulking and weather-stripping, guards against drafts and air leaks. Insulation can be done on floorboards, doors, and any part of the structure that stores or transfers heat.
“For just an average cost of $200, roof insulation can indeed make a huge difference in energy savings,” adds Greenberg. “Look into the R-value, which measures thermal resistance. A higher R-value indicates better insulating properties. Also, remember to check the qualifications for tax credits; not all insulation products may qualify, so it’s crucial to ensure you’re using eligible materials.”
As the U.S. government pushes to realize the goal of net-zero emissions by 2050, now is the time for citizens to enjoy some juicy incentives to go green at home.
Thanks to the Inflation Reduction Act of 2022, the Green Energy Tax Credit (GETC) program offers tax subsidies to homeowners whose improvement projects incorporate renewable energy. These could include installing geothermal heat pumps, wind turbines, and solar water heaters.
There are also added benefits for those with home loans. These come in the form of Energy-Efficient Mortgages (EEMs), designed to make eco-friendly more affordable.
“This [the EEMs program] is a federal initiative that allows homeowners to finance energy-efficient improvements as part of their mortgage,” says Greenberg. “It’s a fantastic way to bundle in the cost of upgrades without a hefty upfront payment.”
The EEMs program can benefit investors who use a house flipping strategy, in which an investor buys underpriced properties, fixes them up, and quickly sells them for a profit.
Those who are struggling financially may have even more options open to them. The Weatherization Assistance Program (WAP), for instance, provides subsidies for low-income households. After applying, eligible families can expect a home visit and energy audit to be conducted, followed by a recommended project scope for the most cost-effective energy conservation upgrades. Most recommendations include insulating, caulking, weatherstripping, and upgrading heating and cooling systems with energy-efficient alternatives.
“Beyond federal credits, many states and municipalities offer incentives for green home upgrades,” says Greenberg. “Check with your local government and utility companies for available rebates and incentives.”
For instance, California has the Net Energy Metering Program (NEM), which gives homeowners credits for excess solar electricity they generate and put back into the state power grid. These green home improvement subsidies can benefit a range of individuals, from first-time homeowners to veteran landlords to those buying land for investment.
As eco-friendly upgrades gain traction, driven by environmental concerns and financial incentives, upgraded American homes will be kinder on the wallet and the Earth.
Josh is a financial expert with over 15 years of experience on Wall Street as a senior market strategist and trader. His career has spanned from working on the New York Stock Exchange floor to investment management and portfolio trading at Citibank, Chicago Trading Company, and Flow Traders.
Josh graduated from Cornell University with a degree from the Dyson School of Applied Economics & Management at the SC Johnson College of Business. He has held multiple professional licenses during his career, including FINRA Series 3, 7, 24, 55, Nasdaq OMX, Xetra & Eurex (German), and SIX (Swiss) trading licenses. Josh served as a senior trader and strategist, business partner, and head of futures in his former roles on Wall Street.
Josh's work and authoritative advice have appeared in major publications like Nasdaq, Forbes, The Sun, Yahoo! Finance, CBS News, Fortune, The Street, MSN Money, and Go Banking Rates. Josh currently holds areas of expertise in investing, wealth management, capital markets, taxes, real estate, cryptocurrencies, and personal finance.
Josh currently runs a wealth management business and investment firm. Additionally, he is the founder and CEO of Top Dollar, where he teaches others how to build 6-figure passive income with smart money strategies that he uses professionally.