Kitchens are one of the most popular remodeling projects undertaken by homeowners year after year. Kitchens need updates periodically. Appliances need to be replaced, the décor needs refreshing, and the needs of the family change over time. But the spring of 2009 might be the best time to remodel a kitchen in many years.
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The bad economy means that some contractors are offering lower prices so they can stay busy. Many of the materials needed in a kitchen remodel, including appliances, are on sale or are being sold at reduced prices in an effort to sell products, keep employees working and businesses afloat, and to capitalize on the fact that many people will decide to remodel now to take advantage of the new Federal Tax credits for energy-efficient remodeling. The Economic Recovery Act of 2009 (“the “American Recovery and Reinvestment Act of 2009”) offers a number of Federal income tax credits to homeowners who update their homes and improve their energy efficiency.
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How can kitchen remodeling take advantage of the Economic Recovery Act’s energy efficiency tax credits?
· Buy high-efficiency windows with UV coatings. You will be able to claim a tax credit for 30% of the cost up to a total credit of $1,500 in a single year (for all improvements)
· Take advantage of the opportunity to upgrade the insulation and choose the most efficient insulation. You can also claim 30% of the cost toward an annual total credit of $1,500RemodelOrMove.com: Contractor Selection Workbook
· Replace an exterior door with an energy efficient model and, again, claim 30% of the cost toward a total credit of $1,500 in a single year.
· Put the kitchen on either a separate water heater or a tankless/instant water heater. The instant water heater won’t qualify for a tax credit, but you will have hot water faster and at a lower cost. Installing a Solar Water Heating system for the kitchen (or the whole house) will save a huge amount of money on water heating costs and will qualify for a Federal tax credit of 31% of the cost, with no limit on the amount you can claim for a credit on your next tax return.
· It might also be a good time to install a new heating/cooling system for the kitchen or for the whole house. Installing a Geothermal heat pump, a photovoltaic (solar) heating system, residential small wind energy system or a residential fuel cell and micro-turbine system would also qualify for an unlimited tax credit for 30% of the cost of the system.
The next step is to also investigate tax credits, rebates and low-interest financing options available through your state government and your utility company (gas, electric). If you live in Pennsylvania, for example, the State offers the “Keystone HELP Energy Efficiency Loan and Rebate Program” to help homeowners improve the energy efficiency of their homes. The program offers several types of low-interest loans and, for projects completed after February 23, 2009, Energy Star rebates and Advanced Performance Energy Star Rebates of up to $250 and $500 respectively. If you live in the area served by PECO, you would also be eligible for low-interest loans for several energy-efficient technologies and renewable technologies, such as heat pumps, air conditioners, geothermal systems and solar systems. PECO Energy also offers rebates of $50 on qualifying water heaters and $300 on qualifying furnaces or boilers.
Additional information about these programs and about programs in other states is available at http://www.dsireusa.org.
Where can you find savings opportunities on remodeling materials? You’ll probably need to shop around and buy wherever you find the lowest price for each item you need. For example,
· It’s a great time to buy new kitchen cabinets. Between December 2007 and December 2008 cabinet sales declined by 40%. Between December 2008 and March 2009, sales increased by 10%. Whether because of the economy or the remodeling season (don’t forget that cabinets will account for at least ¼ of the total cost of a kitchen remodel)
· Lumber prices are at a thirteen year low.
· Major Appliances are being discounted between ten and thirty percent
· Floor coverings are being discounted 10% or more
· Drywall prices have declined somewhat
And if you just want to be kind to the environment, you might look at high-efficiency ventilation systems, fans and lighting. All in all, the spring of 2009 is the ideal time to save a bundle on kitchen remodeling costs and also reap the benefits of lower utility costs for many years to come.