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How You Can Green Your Home and Cash in on Stimulus Money

Energy-saving systems for the attic, basement, and in between have effectively gone on sale, courtesy of the United States Congress.

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Home energy experts often recommend people first invest in eliminating wasted energy. That includes tightening a building's shell with attic insulation and other sealing measures before investing in new mechanical equipment.

Mr. Nadel suggests consumers with questions about priorities contact a contractor trained by the federal Home Performance with Energy Star program. He or she will analyze, sometimes at no cost, how to align a particular home's needs with available tax incentive and rebate programs.

In these tough economic times, consumers shouldn't necessarily cling to conventional wisdom. Since contractors need work, homeowners might find that well-priced labor will catapult a systems upgrade to the top of a home-improvement priority list, according to Alan Meier, associate director of the Energy Efficiency Center at the University of California, Davis. What's more, he says, the new federal push for renewable energy could affect a homeowner's calculus, especially in states with aggressive incentives of their own.

"The federal government wants you to invest in solar and other renewables," Mr. Meier says. "Given all the tax credits, it may in fact make solar panels more cost-effective for the consumer than energy conservation," such as adding insulation or highly rated windows.

Outside the home, hybrid vehicle owners have new reason to soup up their rigs. Plug-in conversion kits, which replace existing batteries with larger ones that plug into electrical outlets, now generate tax credits worth 10 percent of the kit's cost (maximum credit value: $4,000). Congress this month also increased the number of new hybrid plug-in vehicles, expected to debut in showrooms later this year, which will qualify for tax credits worth anywhere from $2,500 to $7,500, depending on battery size.

No matter which investments consumers choose, the process of claiming benefits may require perseverance. King, the heating stove dealer, says he's received calls this year from accountants who had mistakenly challenged their clients for wanting to claim tax credits on stove purchases. Other accountants note consumers aren't always sufficiently organized or diligent to claim what's due to them.

"This is a very unique and narrow bunch of credits," says Mark Steben, vice president of tax resources at Jackson Hewitt Tax Service. "You're going to see a large group of people who qualify but don't take advantage of it."

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