If you are considering home remodeling, renovation or addition, now is the time to think green – to save the environment and to earn some very nice rebates and tax credits. It might also be the best time ever to think about replacing your heating and cooling system(s) with super-efficient solar panels or a geo-thermal system. These “big ticket” upgrades have big price tags, but they also earn some equally big tax credits. They also often qualify for special energy efficiency financing. The Economic Recovery Act of 2009 contains an open invitation to remodel your home with an eye to energy efficiency!
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The current recession is making this a good time to remodel if you can afford it. The number  of new remodeling or renovation projects is significantly lower than it was even four RemodelOrMove.com: Contractor Selection Workbookmonths ago. Contractors are finding themselves without work and without a way to pay their employees or keep them busy. As a result, the costs for labor and project management are sometimes as much as 10 or 20 percent below usual prices. 
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The cost of a number of construction materials has also dropped in recent months. 
If you are planning to pave a driveway, for example, you can take advantage of prices that have dropped suddenly in the past few months. The same is true of roofing. For example:
 
 
12/03 to 10/08
 
10/08 to 1/09
Asphalt paving mixtures and blocks
125.9
 
-14.4
Asphalt Felts and Coatings
99.6
 
-5.3
Prepared asphalt & tar roofing & siding products
99
 
-3.2
 
Lumber prices have been falling steadily since 2003. Between December 2003 and October 2008 lumber prices dropped 11.3%, but in just the period between October 2008 and January 2009 those prices dropped an additional 5.3%. Metals prices have also dropped noticeably in the period from October 2008 to January 2009. Some other prices (such as gypsum and many concrete items) have increased. 
 
Overall, the consumer price index for construction materials and components increased steadily from December 2003 to October 2008 by 17.5%, but between October 2008 and January 2009, there was a decrease of 2.5%.
 
The new tax credits outlined in the Economic Recovery Act of 2009 offers Federal Income Tax Credits for remodeling for energy efficiency that are triple the amounts offered in previous tax credits for energy efficiency. Instead of a total remodeling credit of $500, you can claim a credit of up to a total of $1500. The cap has been removed on the amount you can deduct for new energy-efficient windows, as well.  But if you invest in a solar panels system or a geothermal heating/cooling system, you can deduct a full one-third of the cost in a “super credit” on your Federal taxes.
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The benefits of energy-smart remodeling can also extend to your state and local taxes. Many states offer tax credits and rebates for installation of energy-efficient equipment in the home. Many power companies (electric, gas) also offer rebates and special financing options for energy-efficient systems. For example, if you live in Wyoming, in an area served by the Black Hills Power Company, you would be eligible for a rebate:
Residential Energy Efficiency Rebate Program (BHP) – incentives of up to $1,500 on heat pumps, water heaters, electric resistance heat systems or Geothermal heat pumps based on capacity and efficiency.
 
Wyoming also has a Photovoltaic Incentive Program which offers grants of $3,000 or 50% (whichever is lower) to residents who install photovoltaic or photovoltaic hybrid systems. 
 
If you are planning a remodel, you will find that this is a wonderful time to start a project and save money. If you can make some energy-efficient decisions you might also find that you are eligible for tax credits, special financing, or even a rebate. Check with you local utility company and with the state department of energy.
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