Geothermal systems cost from $25,000 to $40,000 and are supposed to reach “payback” in seven to ten years. If you are inspired by this account to think about going for geothermal, you can still take advantage of the biggest subsidy, the Federal Renewable Energy Tax Credit. The “big kahuna,” as I call it, is good through 2016. You get a whopping 30 percent back from your geothermal heat pump expenditures on your federal tax form. You can use it even if you pay the Alternative Minimum Tax.

Pennsylvania offers a $1,200 rebate for a residential geothermal system and it also has some creative financing such as a Federal Tax Credit Anticipation Loan.

New Jersey has some subsidies, none specifically for geothermal, all applicable to fossil fuel as well. To get the most help you will probably need to both insulate and buy new HVAC systems. The more neglected your house, the bigger rebate you can get.

The federal tax cap for fossil fuel improvements was $1,500. This year’s limit is $500, based on 10 percent of the cost of improvements. For instance, spend $3,000 on Energy Star-rated air conditioning, and you get $300 back.

In New Jersey, if your air sealing or insulation purchase makes a 10 to 20 percent improvement, New Jersey gives you up to $1,000 cash back, based on 50 percent of what you paid. You might also reap several hundred dollars in bonuses based on the HVAC equipment you bought.

But if your total energy savings amounts to as much as 20 to 25 percent, New Jersey gives you up to $3,000 back plus you are eligible for a no-interest loan. Appliances, doors, and windows don’t count. When your energy savings exceed 25 percent you can get the no-interest loan plus $4,000 in cash. That’s pretty good, though it’s less than half of what you could have gotten last year.

With these kinds of “Let’s Make a Deal” opportunities, the government wants to monitor the contractors doing the deal quite carefully. So before you do anything, you must, absolutely must, get your house analyzed by a contractor certified by the Building Performance Institute, a New York-based national standards development organization.

Understandably, lots and lots of individuals and companies are scrambling to get BPI certified. Within a 15 mile radius, 27 companies have some kind of BPI certificate, and it’s easy to find them at Among them is Alexander Road-based Tindall & Ranson, which installed a dozen WaterFurnace systems last year and expects to do even more this year. BPI-certified and able to provide only fossil fuel improvements are Redding’s Plumbing on Nassau Street and Princeton Fuel Oil on Hovey Avenue in Hamilton.

Theoretically, different companies could do the BPI inspection and then do the remediation. We tried that. We had our house analyzed by an independent inspector, but we never got around to finding an insulation company.

We liked the one-stop-shop option with Princeton Air, which relieved us from the job of being the general contractor. After Princeton Air certifies the job with a BPI inspection, it can do both the insulation and the HVAC work. I was also relieved that they took care of the paperwork to get the state rebates. Check to see that your provider is willing to do that. I’m so happy with this job that I would do it again, even though the 2011 rebates are somewhat smaller.

Here’s testimony from an equally satisfied customer, Scotty Neal, of Pittstown, NJ, a mathematician who worked at Bell Labs and Lucent before taking public his own company, Commvault. In July 2010, his electric bill was $275, and he attributes $100 of that to the air conditioning. The previous owner of the house paid from $450 to $500 in a similar hot month, so Neal predicts a savings of $200 to $250 per month in summer. Similarly, the previous owner paid $2,500 to heat with oil during four winter months, and Neal predicts a savings of at least $500 per month.

“We’ll save around $2,000 per year on heating, and around $500 or so on air-conditioning,” says Neal. “That’s an eight percent return on investment (after the Federal rebate). But I’m especially pleased with the performance of the geothermal system. It has good control of the house humidity.”

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