The cost of energy continues to rise. It does not seem to matter whether you heat your home with electricity, gas, oil or wood, every year the cost is rising. In 2008 when we had the cost of oil spike to well over $100 per barrel, all of the other energy sources seemed to get on the band wagon as well so there was no safe haven. Many people are looking for ways to reduce their energy foot print and save money. One of the approaches that people are talking about is having an energy audit completed for their homes and of course the financial institutions are offering Energy Efficient Installment loans as a new product. Imagine that!
The government is in on the act as well and depending on where you live, they will offer incentives to insulate your home, upgrade your furnace, replace windows etc all in the aim of reducing the overall energy that we use every day. More on this later in the post. First we will talk about what you need to do to qualify for government incentives and also apply for an Energy Efficient Installment loan.
Arrange for an Energy Efficiency Evaluation
Before you begin, the very first step is to hire a certified energy adviser. This is a person who is qualified to assess homes and is certified by the local government agencies to do this kind of work. If you do not hire a certified energy adviser the government will not accept your application later on for any incentives, so this is an important first step to get right.
The purpose of arranging for a certified energy adviser is to a have him or her come into your home and inspect the home for energy loss and prepare recommendations for you to improve your homes overall energy foot print. The list of recommended energy improvements that he will prepare will cover such items as the roof, insulation, the windows, the doors, the heating system, the water heater, the cooling system, air exchange , the fireplace if you have one, and any potential areas were air is leaking into or out of the home. As you can see the report is quite comprehensive and will provide you with a clear list of what needs to be completed.
Evaluate Changes You are Prepared to Make
You may find this a bit daunting at first, however review each item one at a time. You may need to obtain estimates for various items that you are considering to upgrade. For example, if you have a low efficiency furnace, chances are that the energy adviser is going to have this on his list to upgrade. You will want to ask for an estimate from several suppliers of what it will cost to replace the furnace with a high efficiency furnace and the savings you can expect once it is installed.
Cover each item in this manner until you have a final estimate of the total cost of the potential improvements. Next you need to decide which ones you want to proceed with.
Review the Government Incentive Plan
Before making a final decision regarding improvements, review the details associated with the incentive plan from the government to make sure that you will qualify after completing the work you plan on doing.
This is an important issue since it will impact your overall cash flow and your monthly installment payments you are likely going to need.
Establish a Budget, Explore Financing Options
Once you have all of the data you need you can prepare a budget for how much all of the improvements will cost. Note that you will need to pay for everything first, then apply for the incentive program before you receive any money from your local government.
Your financing considerations must take this last aspect into account. Your local bank can assist you with figuring out how much money you can borrow to cover your planned improvements and what the monthly installment payments will be. This Energy Efficient Installment loan is really just like any other loan, however the banks will market them as Energy Efficient Installment loans
Time Lines for Completing the Work
Some of the government incentive programs have established a deadline for completing the work. When you review the local program, make sure you find out when this date is so that you do not complete all of the upgrades only to find out that you missed the deadline. Once the work is completed, you will need to arrange for the certified energy adviser to come back and audit the work that has been completed.
You will need this audit to apply for the incentive program and to receive your rebate. Note, you need to allow for sufficient time for the auditor to complete his audit and prepare his report.
Paying for your Energy Efficient Installment loan
As soon as you begin spending money on improvements you will need to have your Energy Efficient Installment loan in place to pay for all of the upgrades. The cost of the loan will be offset over time by the savings you receive in reduced energy costs to heat and cool your home, water heating and of course the government incentive that you eventually will receive.
Cash flow is important, especially when you are arranging for a loan. Take the time to make sure that you will be able to handle the increased installment payments until such time the loan is paid for. The savings in energy cost will help as will the rebate, however the payback in terms of energy savings vs cost may be several years so you have to be able to self fund any increase in monthly installment charges from loans that are needed to fund this work.
The certified energy auditor may be able to provide you with some idea of your average savings based on your existing electrical and heating bills. You may want to have these available when he or she arrives to complete the energy audit of your home.
Disclaimer: The views expressed by this author don't necessarily reflect the opinions of Lazerloan.com, it's owners, or it's affliates.
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