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Wednesday, December 7, 2011

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Consumers face higher costs this year, but there are still ways to save

Many Americans were socked with higher-than-usual energy bills this past summer. Unfortunately, winter won't provide much of a break. The Energy Information Administration expects the average household with heating oil will spend a record $2,493 from October through March, up 8% from last year. Those heating with propane will spend as much as $2,979 (up 9%); natural gas $744 (up 3%); or electricity $956 (down 1%).

For consumers looking to cut costs this winter and beyond, experts recommend looking into financial assistance from the government while it lasts, including federal tax credits worth up to $500 for energy efficiency home improvements.

Have the tax credits been extended for 2011? On December 17, 2010, President Obama signed the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010. This law extended the tax credits for energy efficiency into 2011, But at lower levels. The levels reverted back to those in effect in 2006 and 2007, which were 10% of the cost of the improvement, up to $500, with a $200 maximum for windows, and several other set maximums.

Highlights:

* $500 lifetime limit. If you got over $500 in these tax credits from 2006 - 2010, you are not eligible for anything more.

* 10% up to $500 for insulation, roofs, and doors. Windows capped at $200, but qualifications include ENERGY STAR.

* Furnace and boilers capped at $150, and all furnaces and boilers must meet 95 Annual Fuel Utilization Efficiency (AFUE).

* $50 for advanced main air circulating fan, $300 for air conditioners, air source heat pumps, water heaters, and biomass stoves.

It's not too late to shop around for deals on fuel, either. Providers' rates largely depend on when they purchased their fuel supply, so calling around or joining cooperative buying groups that locked in prices months ago could yield a better price.

Consumers can also cut their energy costs by making smaller home improvements. A home energy audit, available for free in many states, can help pinpoint problems -- including too-thin insulation and drafty areas. Spending as little as $30 for some caulk and sealing kits can cut your energy bill by up to 20%, a savings of as much as $1,000 a year. Programming your programmable thermostat so that the house is 10- to 15-degrees cooler while you're out at work or while you're asleep can save you up to another 15%.

For more information, log on to Smartmoney.com or stop by your local County ISU Extension and Outreach office and ask for copies of Home Tightening, Insulation and Ventilation - Home Series 1 or Home Heating and Cooling - Home Series 2 (Publications EDC 0389A or 0389B).