When it comes to taking care of your home, helping the environment and saving money, energy efficiency is the way to go. I recently talked with Andy Wolfe from Arronco Comfort Air and Professional Energy Consulting, his own company. I wanted some extra information about new tax credits and the best systems for your home.

We asked for the top three ways you can lower your energy bills and make your home efficient:

1.) Air seal the envelope to reduce air leakage.
2.) Add insulation to basement walls and in the attic.
3.) Have a high-efficiency furnace installed. (Geothermal is best.)

Cutting-edge heating/cooling technologies can be expensive! But that’s why there are tax credits available. Not only is there the Energy Star tax credit we’ve talked about – this can help you with a certain level of energy upgrades by providing money back at tax time. Wolfe said he has definitely seen customers taking advantage of the energy credit by buying more efficient HVAC systems, replacing windows and adding insulation.

However, did you know there is another tax credit that can help you with installing the kind of major energy upgrades that will provide you with maximum efficiency? And that these credits can provide you with 30% tax credit with no cap?

There is a special credit available for the installation of certain systems, including systems such as Geothermal heating and cooling, Solar thermal, wind, and Solar PV that is 30% of the cost with no cap, and it is good through 2016. Wolfe says geothermal one of the best systems you can install. (See video below to understand how geothermal works.)

A typical geothermal system will run about $15,000 – $25,000. Dual fuel systems are popular too, and more affordable. (This means a combo electric heat pump and gas furnace in one — and Wolfe says he recommends a system like this at minimum.) But because of not only the tax credit that can come with geothermal system, but also the major additional energy savings, Wolfe says he is selling more geothermal systems. Geothermal has double the lifespan of a heat pump, no outdoor unit to bother with, and offers more comfort. He says customers “usually find that the geothermal is a smarter investment than the dual fuel.”

He also points out that geothermal can be installed as a dual fuel system — they use the existing (or new) gas furnace for back-up heat, and the geothermal system for the majority of the heating and cooling.

Wolfe says Arronco Comfort Air is seeing double the geothermal installations. He is anticipating another huge increase next year in geothermal sales, depending on economic climate.

“We are seeing that homeowners are making more energy efficient decisions by upgrading their heating and cooling equipment because of the tax credit, but also because of the increasing price of energy and fear of what energy will cost in the future. The tax credit certainly helps some, but most of the increase in business is coming from the increased awareness in geothermal being the most energy efficient and environmentally-friendly system available.”

The tax credit applies to qualifying systems (again, these are the major energy-efficient systems) installed and servicing through the end of 2016. Perhaps something to start planning for today. Wolfe provided us with a informative brochure that you can download to read more about the credit. (This talks about geothermal specifically, although there are a couple of other systems that qualify as mentioned above. You’ll want to talk to an expert.) There is also a commercial credit for installation in businesses.

More:

Check out this master list of Energy star credits. (Note the 30% with no cap section.)

Read this story from Renewable Energy World about geothermal systems.

Watch this video to understand how geothermal works:

Related...

• January 19, 2010 -- Green Living: Stats and Tips
• December 3, 2009 -- What is a HERS Rating?
• February 8, 2010 -- Tax FYI: Energy Star Credit
• October 6, 2009 -- Filing for the Energy Tax Credit