Thursday, May 21, 2009

Residential solar energy the top investment



Residential electricity rates have grown by an average of 25% over the last 6 years. This is one reason that residential solar energy is growing rapidly. The new 30% federal tax credit has created a dramatic boost to the residential solar energy market. Falling solar panel prices have also added to the financial incentives. In some locations, with combined federal, state and local incentives, the payback on the initial residential solar energy investment can be as short as 6-10 years. Since the beginning of 2009, residential solar energy installations have grown by 50%.
residential solar energy

The economics of residential solar energy


With electric utility rates increasing substantially every year, estimates are that the average homeowner will spend over $100,000 in the next 25 years on electricity. With costs that high it makes sense to turn that expected cost into an investment that yields numerous dividends. Returns on a residential solar energy system can be as high as 20-25%. This figure reflects the lower cost of investing in a solar energy system now - combined with the increase in value to your home. According to the National Appraisers Institute, the value of your home increases 20x the annual savings in electricity. So if you save $1,000, your home value increases $20,000 without increasing property taxes.

Net-Metering and feed-in tariffs


Most residential solar energy systems will be connected to the grid through a meter enabled for net-metering. This means that when your solar panels are generating more power than you are using, the excess power will be fed back into the grid and your meter will actually spin backwards. Your electric utility will give you credit for the energy you generate, deducting money from your bill. In some locations that are using feed-in tariffs, the utility company is required to pay consumers up to 300% more for the power generated. While feed-in tariffs are not currently widespread, you can see the impact they have on consumer demand for residential solar energy. Ask your solar installer if there are feed-in tariffs working in your area.


Residential solar energy - types


Solar photovoltaics - solar panels


When most people think of residential solar energy, they think of electricity and solar panels. Residential solar panel installation can be completed relatively quickly by trained solar installers after an initial consultation and signing of contracts and rebate paperwork. Solar panels can be placed on the roof of your residence or garage, or elsewhere on your property depending on space requirements and shading.

Residential solar hot water heating


The most cost efficient way to implement residential solar energy is through a solar water heater. Because most household energy is used to heat water for showers or laundry or dishwashing, having the sun heat your water for free is a great way to save money. Solar water heaters don't create electricity - they simply collect the heat from the sun and store it in a tank for later use. Solar heating works the same way the hose in your backyard works when it's exposed to a few hours of sunlight. The water gets very hot - typically rising 10 degrees per hour of sunlight. These systems are also fairly simple mechanically. The solar installer who implements these types of residential solar energy systems has a background in plumbing.
Solar water heating is also a great way to heat your pool and spa.

Residential solar energy - hot air


Another extremely simple use of solar energy for your home is a solar hot air collector. A solar collector made out of thin metal and painted black is fastened to the side of the home and air is circulated through it with a fan. Check out the video of the professionally manufactured solar hot air collector made out of used soda cans on the DIY solar page.
Residential solar energy - for cooling

Yet another efficient use of solar energy for your residence is for cooling. A solar attic fan is inexpensive, simple to install and requires no energy to operate. It can significantly lessen the air conditioning required to cool your home in summer by lowering the temperature around 10 degrees.

Residential solar energy - Lighting


Solar lights are inexpensive and simple to install. Solar lighting is a great way to get started with solar energy. There are many different types of solar lights for your garden, pool, or to enhance security. Solar lights are unique because there are no wires and can be placed in remote areas that lack existing power sources.

Passive solar design


Residential solar energy advocates are always quick to emphasize the benefits of passive solar design. Passive solar is truly free energy. Its as simple as it gets

Wednesday, May 6, 2009

12 Personal Finance Lessons To Be Learned From This Recession

12 Personal Finance Lessons To Be Learned From This Recession
Bill Shrink Guy



Everyone I know is sick of this recession, and sick of hearing about this recession. For one, the media’s attention to the global financial situation is depressing. But as many have pointed out, we are in this situation because of our own devices. On the individual level, poor financial and debt management, have exacerbated outside factors such as the housing market collapse and high rates of unemployment. For others, indiscriminate consumer debt has led to a number of individual crises. But in such a climate, there is a lot that can be learned. While it would have benefited everyone to know this several years ago, here are twelve personal financial lessons that can and should be learned during this recession.

Learn How to Plan Ahead

It’s no secret that poor planning contributed to why so many people are currently in untenable financial situations. Don’t Panic. Figure out where you are at, where you want to be and put in place a realistic plan for getting there. The majority of businesses without plans in place before they start operations do not succeed. So if you are serious about creating a way to get ahead, or even just caught up, this step could not be more necessary. Unique circumstances will come up and cause you to stray from your plans temporarily, but structure is necessary in order to monitor your progress, and stay focused.

Learn From Past Mistakes - Then Put it Into Practice

Americans have an average of $10k in credit card debt. In order to identify how you came to be where you are at specifically, take a look at your spending for the last year (or even several years). Then locate what percentage of spending went to each type of expense. Chances are, the figures will be surprising and maybe upsetting at first when, for instance, you realize how much you spent going out to dinner or on entertainment. Figure out a realistic percentage that you would like to reduce your less-than-necessary expenses by, and then work this into your plan. The sense of urgency caused by the current recession can be an impetus to your learning about, and consequently fixing, poor money management practices.

Learn to Understand, Hate and Attack Debt

Prioritize debt. Snowball. Pay off your highest interest rate first. Basic advice, right? The problem is that people have been regurgitating this theory for years, but most do not put it into practice. Paying off debt can be an arduous task, but it can also be quite rewarding. This step requires individuals to plan out their debt and then follow through with attacking it. A plan may seem difficult to stick to at first, but after several accounts are paid off, you’ll be surprised to see how quickly the remaining debt is repaid with more money being allocated to principal in subsequent months. One byproduct of this exercise should be a new understanding of debt – and you will probably learn to avoid credit cards like the plague.

Learning to Distinguish Want vs. Need

After figuring out much money you’ve unnecessarily spent in the past, this should come naturally. I’m not suggesting that you should never go out to eat or splurge on anything ever, just that you implement a higher level of self control. For instance, the term “special occasion,” should have a greater meaning once you decide to get serious about your finances. When you condition yourself to realize that spending $100 on cocktails and dinner when you go out for your third cousin’s coworker’s birthday will mean that you are able to spend $100 less the next month on your aggressive debt repayment, you’re on the right path. In short, consider the opportunity cost of your spending.

Learn to Save – Even if You Start Small


The oldest piece of financial advice relates to saving: put an emergency plan aside (6 – 9 months worth of expenses) should you lose your job. But, does it make sense to service a savings account with a 2-3 % yield, when remaining credit card debt rates of up to 29%? Yes, because it is not wise to forgo saving entirely in order to repay debt. Instead of spending less on debt repayment, save in the form of cutting out extra expenses. The problem for many people is that they live month to month and they don’t develop healthy saving habits until they are in their thirties or forties. Contributions to a savings plan should be recognized as the first of your necessary monthly expenses, so that money saved will never be thought of as money that can be spent. Even if your savings rate starts small, you can always increase in the future.

Learn to Monitor Your Expenses


Scrutinize your current bills – cell phone, internet, credit cards, et cetera. I’d suggest to continually call your service providers to find out if there are better deals available, or if they can do something special for you. These days, customers have more power than ever; for instance, try suggesting that you will go elsewhere if vendors are not able to sweeten existing deals. Using leverage to get a better deal is a time-honored tenet of this more or less ‘free market’. Companies know that it is more cost-efficient to keep an existing client than it is to get new customers, and using this in your argument with customer service may be a way to get reduced pricing, or extra free services.

Learn to Stay on Course


When I first started to cut debt aggressively about a year ago, I found myself able to dramatically reduce my monthly bills and pay down debt at a rate that I never could have imagined. The problem was once I paid about half of my debt down, I found myself at a plateau. It was only after realizing that I had replaced my old expenses with new ones did I start making ground again. My once super-frugal approach to eating out and playing golf only about twice a month became more lax, and this was putting a damper on my ability to repay debt at my preferred rate. It took an evaluation of my recent expenses to see how I had strayed from my plan and to figure out how to get back on it. This is extremely important to keep in mind: be careful not replace some unnecessary expenses with others.

Learn to Take Responsibility


Personal finance is all about being responsible and taking initiative: no one will do these things for you, and learning to manage your finances is not something that you just wake up with one morning. It is every individual’s responsibility to monitor their bills and make sure they are not incurring any unnecessary fees with their banks or credit card companies, and also to monitor their credit score closely. And, if necessary, to repair their own credit. For those that own their own home, now is a great time to refinance and a good credit is imperative to improve your rates; for those looking to buy, knowing what your credit report says is only the first step in understanding what type of interest rate you will likely get. And, of course, the better your credit is, the better your interest rate will be.

Learn How to Get Organized


To those who are not used to monitoring and managing their finances closely, this may sound like a lot of work. But once you get a system in place, it should only take about one hour per week to stay on top of everything. This will include: making sure that credit card due dates are not changing, that rates are not increasing, monitoring activity to your charge accounts, tracking the progress of your overall debt-to-income, and making sure you are always getting the best deals possible. These of course, are just a few of the examples.

Learn to Become Competitive and Creative


One of the most important things to take from a recession is that nobody can not just coast by anymore. For those seldom challenged in the workplace, it would make sense to improve your skill set, continue education, and network now. The medium- to long-term for many, still remains uncertain. For those that have fallen prey to our generation-high unemployment rates, it’s time to reevaluate your previous career and at least start considering other alternatives. In today’s changing and evolving marketplace, dynamic individuals are those which succeed.

Learn to Become a Deal Hunter


While the housing market deflated, prices in most other industries have dropped in the last year as well. If you are serious about improving your personal financial wherewithal, try thinking about buying new as a way to replace old, not to satisfy want. Even better, think about buying slightly used as a way to replace the old. The ‘replacing’ aspect is key. If you need a newer vehicle, try finding a fleet rental and you will be blown away by the potential savings. Even in industries where consumers don’t traditionally haggle for prices, deals can be found with retailers looking to unload stock.

Learn to Diversify

Where is your money going every month, and from where is it coming in? Cash? Currencies market? CDs? Commodities? Residual income? Profit-sharing? Trust fund? Is it possible for you to create a second income stream? In these uncertain times, individuals with contingencies and fall back plans usually fare the best. Think of the old saying, “don’t put all your eggs in one basket”. Always be on the lookout for producing additional income-generating opportunities. For some this might mean getting a part-time job, or taking on freelance work. My parting advice: be wary of get rich quick schemes on Late Night TV.

Friday, May 1, 2009

Tax Credit for New Home Purchase

Tax Credit for New Home Purchase


This tax credit is available for qualified buyers who on or after March 1, 2009, and before March 1, 2010, purchase a qualified principal residence that has never been occupied. The buyer must reside in the new home for a minimum of two years immediately following the purchase date.

We will accept applications for allocation of credit by fax only (916.845.9754), starting March 1, 2009; however, we will not send notifications of credit allocation until we have developed procedures. Once we begin processing allocation applications, credits will be allocated on a first-come, first-served basis. We will update this page as soon as we begin mailing credit allocation letters. We plan to begin mailing credit allocation letters no later than May 1, 2009. This delay is necessary to allow us time to develop a system to capture and verify the application information, allocate the credits, and send the credit allocation letters. Please be patient with us and do not send applications more than one time.
Tax credit amounts

California allocated $100,000,000 for this tax credit. Buyers must apply for credit allocation from us. Applications will be reviewed and credit allocations will be made on a first-come, first-served basis. Once $100,000,000 has been allocated, the tax credit will no longer be available. Please check this page for updates on the allocated and remaining credits available.
Total credit allocated: $0
Remaining credit available: $100,000,000

Note: The remaining credit amount displayed above only reflects allocations processed. This amount will be updated once we begin mailing credit allocation letters, which is expected to commence by May 1, 2009. This amount does not include applications that have been received, but not yet processed.
Applications for New Home Credit received, but not yet processed through 4/29/09
As of Total Applications received: Total Credit claimed:
3/4/09 173 $ 1,715,826
3/11/09 711 $ 6,987,515
3/18/09 1,188 $ 11,599,825
3/25/09 1,710 $ 16,647,498
4/1/09 2,624 $ 25,578,709
4/8/09 3,135 $ 30,559,124
4/15/09 3,589 $ 34,939,035
4/22/09 4,199 $ 40,879,872
4/29/09 4,880 $ 47,353,795

Graph that shows the figures in the table above

This reflects the total amount of credit reported on applications received as of the date indicated. This amount has not yet been verified and may include duplicate, incomplete, and invalid applications. This amount is provided for informational purposes and does not reflect the actual amount to be allocated. We will update the amount received, but not yet processed, on this webpage each Friday. As we approach the $100,000,000 limitation, we will update the reported amounts on a daily basis. Keep in mind, that all applications will be processed on a first-come, first-served basis, based on the date received by fax only.

California allows qualified new home buyers a total tax credit amount equal to either five percent of the purchase price or $10,000, whichever is less. Taxpayers must apply the total tax credit in equal amounts over three successive taxable years (maximum of $3,333 per year) beginning with the taxable year (2009 or 2010) in which the new home is purchased.
How to apply

* Within one week (seven calendar days) after the close of escrow:
o The seller must complete Part I of Form 3528-A, Application for New Home Credit, certifying that the home has never been occupied, and provide a copy to the buyer or escrow person.
o The buyer will complete Parts II & III of Form 3528-A.
o The escrow person on behalf of the seller and buyer will fax the completed Form 3528-A to FTB at 916.845.9754, and provide a copy to the buyer.
* Fax is the only delivery method that will be accepted and considered for credit allocation by FTB, as the date and time stamp on the fax will determine the order in which credits are allocated.
* Fax only one completed application per residence with all qualified buyers listed. Do not include information on nonqualified buyers. An incomplete application may delay or prevent credit allocation.
* Do not fax the application to FTB before escrow closes.
* Do not fax the application to FTB more than once. We will process the applications in the order received as quickly as possible.
* Escrow companies should only send one application per fax transmission.
* The buyer keeps a copy of the completed Form 3528-A for their records.
* The Form 3528-A is now available online as a fillable form. Simply fill in all required information, print the form, and sign. If you fill out the form by hand, please print numbers as clearly and neatly as possible using CAPITAL LETTERS and staying between the lines. The faxes can be very hard to read.

Application processing

* The buyer will receive notification of credit allocation from us.
* An allocation of credit will not be issued if:
o The home has been previously occupied.
o The application is not received within one week after the close of escrow.
o The application is received after the total credits available ($100,000,000) have been allocated.

Requirements of the credit

* The home must be a "qualified principal residence" as defined under California Revenue and Taxation Code Section 17059(b)(1). The home must:
o Be a single-family residence, whether detached or attached.
o Never have been previously occupied.
o Be occupied by the taxpayer for a minimum of two years.
o Be eligible for the property tax homeowner’s exemption under California Revenue and Taxation Code Section 218.
* For over three successive taxable years, the total credit allocated among owners that occupy the home must not exceed $10,000. (Multiple qualified buyers that occupy the home will be allocated credit based on the amount paid and their percentage of ownership.)
* Any credit that reduced tax on a tax return must be repaid if the buyer does not occupy the home for at least two years immediately following the purchase date.
* FTB may request documentation to ensure buyers have complied with the requirements of the credit.

Claiming the credit

* The buyer must receive an allocation of credit from us to claim the credit. The credit allocation letter will state the amount they can claim listed by tax year.
* The buyer should refer to Publication 3528 (available by 12/2009) for instructions on claiming the credit.
* The buyer must claim the credit on an original timely filed return, including returns filed on an extension.
* Special rules apply to married/RDP (Registered Domestic Partners) taxpayers filing separately, in which case each spouse is entitled to one-half of the credit, even if their ownership percentages are not equal. For two or more taxpayers who are not married/RDP, the credit amount will have already been allocated to each taxpayer occupying the residence on their respective credit allocation letter.
* If the available credit exceeds the current year net tax, the unused credit may not be carried over to the following year.
* The credit is not refundable.

Definitions

Purchase date:
The date escrow closes.

Qualified buyer:
A taxpayer who purchases a single-family residence, whether detached or attached, that has never been occupied, that is purchased to be the principal residence of the taxpayer for a minimum of two years, and that is eligible for the homeowner’s exemption under California Revenue and Taxation Code Section 218.

Qualified Principal Residence/New Home:
A qualified principal residence means a single-family residence, whether detached or attached, that has never been occupied and is purchased to be the principal residence of the taxpayer for a minimum of two years and is eligible for the property tax homeowner’s exemption.

* Types of residence: Any of the following can qualify if it is your principal residence and is subject to property tax, whether real or personal property: a single family residence, a condominium, a unit in a cooperative project, a houseboat, a manufactured home, or a mobile home.
* Owner-built property: A home constructed by an owner -taxpayer is not eligible for the New Home Credit because the home has not been “purchased.”

Contact us

Phone:

* 888.792.4900 (press 5)
* 916.845.4900 (not toll-free)

Email: wscs.gen@ftb.ca.gov
This is not a secure email address. Please do not send confidential information.