Thursday, January 2, 2014

2013 Federal Residential Energy Efficiency Tax Credit

Here are links and summary statements compiled for my weatherization customer 2013 federal tax preparation:

The Rules: 

The Form: 

For each customer, I provide a number, retail cost of attic, crawl space and wall insulation:
(The general statement from Form 5695, Line 19a)
Insulation material or system specifically and primarily designed to reduce heat loss or gain of your home that meets the prescriptive criteria established by the 2009 IECC

I multiply my discounted cost by 1.5, as retail cost, delivered.

The tax credit for this is entered at Line 21, 10% of the Line 19 items total.

An Example:
A customer In Damascus, Oregon, illustrates that the tax credit, like associated rebates, wrongly emphasizes the adding of insulation. Incentives should rather promote the work that may have greater energy savings and that becomes far more difficult and perhaps unaffordable, by adding more obstructive insulation. In the example, 90% of the savings achieved are not by adding insulation, but rather by removing all insulation to start over.

Here is a summary of insulation costs:

I will report a retail insulation expense paid, of $1613. This is for professional materials, perhaps sold only to professional installers. Most materials were Johns Manville brand, which is sold at Lowe's stores; however "consumer" items include none of these used. A major shortcoming of consumer materials is that they commonly are kraft faced, preventing intimate ceiling contact and often allowing wonderful mouse habitat. Kraft-faced batts lose most of their value where with common misunderstanding, "stapling flanges" are set to joist sides, not faces, absolutely permitting attic air to flood ceilings. I only use kraft facing where batts top up joists, over dirty loose-fill that would contaminate batts. There, the kraft facing is never harmful to intimate fill. I use a stack of materials for very good reasons, and only a bottom layer added, may have a vapor-barrier facing in following a Two Thirds Rule. A 50% markup from warehouse cost is very fair in professional installation, for the tax credit calculation.

This customer will be eligible for a federal tax credit, where there were no other claims since 2010. The total credit that may be claimed in all tax returns of 2011, 2012 and 2013, is $500. This customer will enter the number $1613 at Form 5695 Line 19a. The credit is calculated at Line 20, 10% of $1613, amount $161.

For a big picture of this job, please consult its Paid Invoice, and a sampling of captioned photos in a Picasa Web Album, titled Vermiculite Ruin Of Batt Insulation, 2013

In the rebate application document Paid Invoice, I show that despite near-complete placement of R19 batt insulation, found floor insulation R-value was less than 6. Great crimes of misunderstanding and omission under the batts needed difficult correction. All insulation had to be sent to a landfill, as the batts were contaminated by the vermiculite. Removing the vermiculite, tested safe for disposal, of itself adds much value to the home.

To deal with attic overheating, I had to access, enlarge and protect all soffit vents, my first call to this job. All soffit vents had been completely closed by foolish placement of roofing felt paper and attic insulation. 

Adding R19 insulation, if that found had been R19, would have saved this customer $76 per year. Done properly, as every installer must, savings will be $737 per year. This home is an important example to weatherization contractors, advocates and home owners everywhere, that it is the prep that is needed to save energy now and on into the future. Blindly adding insulation, usually with no preparation, precludes the majority of potential savings.

I hope some will read on in this, as example in their own homes, and/ or as model for need of reform in weatherization programs. Links that follow are to pdf albums at Google Drive. Please know that photos are best viewed by downloading the documents.

Damascus Attic Clean-Out 
Damascus Attic Prep 
Damascus Attic Insulation and Decking 

Damascus Attic Lights This has been available at this blog for several months, through this post.

1 comment:

Keri Russell said...

This post shares so useful information about Federal Residential Energy Tax Credit. Here I got many liable and useful information.

residential attic insulation