A Question of Appliances

Hey Mr. Green,

Can I get a federal tax credit by upgrading the large appliances in my house, which are probably 20 years old? I mean the refrigerator, washer, dryer, and water heater. Even without a tax credit, I'd like to upgrade at least one of these energy hogs. If can't do them all at once, which would be the most cost- and energy-saving one to upgrade?

–Sam in Santa Fe, New Mexico

There are indeed federal tax credits available for some appliances, and for quite a number of other home improvements ranging from windows to roofs to geothermal heating setups. Given our perennial wailing about high taxes, it's a shame we don't hear more about such benefits. According to Energystar.gov, qualifying products purchased up until December 31, 2010 are eligible for a rebate of up to 30 percent of the product's price. And since you live in a sunny state, you might consider solar water heaters, some of which are eligible for a 30 percent credit with no limit on cost. But the water-heater credits (and some others) do expire at the end of this year, so don't procrastinate unless you're sure we can whip Congress into shape and get extensions soon. To find out more about eligibility, click here. Your tax dollars at work—cutting your taxes.

A variety of other rebates are available from utilities and manufacturers that partner with EPA's Energy Star program; click here for more information.

With regard to prioritizing your replacements, a lot depends on the actual condition of the appliances, but I'd start with the refrigerator or the clothes washer, because they use more energy than any other appliances, and huge improvements have been made in their efficiency. For example, a refrigerator made prior to 1993 can use twice as much power as a new model; replacing one that’s more than 10 years old can save you $135 per year. To get more precise savings estimates for appliances, see the EPA's online calculators here (fridge) and here (washing machine).

Next, look at the water heater. Efficient new ones can use 10 to 50 percent less energy than older models, but because it's easy to drastically cut hot water use, I'd make cuts first before getting a new water heater. Simply washing with cold water when feasible can work wonders. You can get further reductions by installing low-flow shower heads and filling the dishwasher completely before running it. Once you've got all that down, then look into new heaters. A tankless or on-demand model is often the most efficient (but expensive) choice, because it doesn't have to keep the water constantly heated.

Dryers get the lowest priority. They generally burn less energy than fridges or washing machines of the same age, and most of the time you don't even need 'em. “Solar drying” on a clothesline or indoor drying on a clothes rack is far more efficient.

Comments

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[automatic vacuum cleaner]

I did a lot of updates in my house including the shower heads, and new water heater, and also replaced all my light bulbs with the energy efficient types. I added all of those for my tax credit.

[Green Laundry Equipment]

And here I thought that dryers would be on the top of the priority list. LOL.

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[Inya Kawin]

Water heater is the cheapest in my place.

[Lana Madison]

Hi, This is one interesting post. I was actually surfing, looking for incentives that I might be able to take advantage of. As far as I know there are Solar Hot Water Rebate presently offered by the government. Its just a matter of asking the right question to the right persons. You should also speak with a nearby MP about the accessibility to state government solar hot water rebate in your town. Appliers need to make application for the rebate within just six months of the hot water system or heat pump installed. Those who are renting can also be entitled for any rebate.

[Stephen Kain]

I just love reading posts like this one..for me if you could upgrade all the appliances in your home the better. Being most of these are energy efficient these days like in Solar Heating Systems that ive read imagine all the rebates that i can obtain.

[North Vancouver Appliance Repair]

What uses are you goin to put these appliances to. If they are going into your primary residence, there are no tax deduction or writeoffs. If they are going into a rental unit you own, you may be able to take a depreciation allowance for them. Check with a tax accountant for the proper deduction/expensing if they are going into a rental.

[alonzo]

I love reading your post. It is very informative.

[Jack Mason]

I think North Vancouver Appliance Repair is right. If you're using the commercial laundry equipment for a rental unit, then it is tax deductible. There are tax write-offs for water saving appliances in your home, but I'm not sure it applies to the laundry.