When Mike Ruggerio called to have a repairman look at an old furnace, he dreaded the report. Winter was on its way, and he was sure the furnace had seen better days. Ruggerio anticipated a large bill.

In the end, the repairman’s suggestion of a new furnace was a lot less cringe-worthy than Ruggerio feared, thanks to a variety of tax credits and rebates that will allow him to write off nearly a third of the cost of the new unit on his taxes and pocket a $200 check from Duke Energy.

Ruggerio, like many homeowners nationwide, was a beneficiary of the American Recovery and Reinvestment Act of 2009. It is part of President Obama’s February 2009 stimulus package that rewards homeowners with a large tax credit for purchasing new high-efficiency air conditioners, furnaces and windows, having their homes insulated, and taking advantage of other weatherization services.

With the addition of local and state offers that reward those purchases, the bill for making your home more energy-efficient is easier to swallow than at any other time in recent memory.

For Ruggerio, a resident of Landon, Ohio, it means a nearly $1,500 tax credit from the Internal Revenue Service for the furnace and a new outside door for the home his two daughters share in Norwood, along with the check from Duke. As an Ohio resident, he was also eligible for highly favorable interest rates on a bank loan for the work through the state’s ECO-Link Program, which can lower the interest on bank loans by as much as 3 percent.

“It was a real win-win situation,” Ruggerio says. “The tax break influenced me to go with the more expensive, higher efficiency furnace, which was $600 more, but the tax credit will make up the difference there. And, given the savings on the electric bill, the furnace will end up paying for itself pretty quickly.”

Ruggerio’s reaction was what government leaders were hoping for with the passing of the American Recovery and Reinvestment Act, which was billed as a lynchpin in the federal efforts on home energy conservation advocacy while spurring spending. As part of the stimulus, homeowners can claim a potential $1,500 federal tax write-off for bringing heating and cooling products, windows and doors, insulation and roofs up to high-efficiency standards. The credit — 30 percent off the cost of improvements, up to a $1,500 limit, for most items — remains in effect this year. The credit does not include the cost of labor.

Local contractors say the effort has been successful, and business is booming. And lawmakers are already talking about further extending the benefit.

The federal tax credit is only part of the picture, though. Homeowners can also chip away at the cost of improvements through state and local credits and rebates, as well.

For Ohioans, the ECO-Link program pairs the state with qualifying banks, which agree to make loans at the discounted rate for up to five years to residents borrowing to make energy efficiency improvements to their homes. By using the program, Ohioans’ savings can quickly add up.

In Kentucky, there is an income tax credit similar to the federal credit, allowing for 30 percent off the upgrades. The commonwealth’s tax credit has a limit of $500, however, ranging from a $100 credit for new insulation to a $250 credit for energy-efficient doors and window installations, and $250 toward the purchase of high-efficiency heating and cooling equipment.

Indiana residents can claim a $100 state tax credit on the tax return for the same upgrades.

Additionally, energy companies are also offering incentives. Local Duke Energy customers can receive a bonus from the company for energy upgrades. Through the company’s Smart Saver program, Ohio and Indiana residents can pocket their bonuses directly — a $200 check toward installation of air conditioners, a heat pump or furnaces that meet efficiency standards, or $400 for a combination of two.

Experts point out that the credits and rebates are only the tip of the savings iceberg. High-efficiency products ultimately pay for themselves through lower utility bills, with each area paced by advancements in technology.

Heating and Cooling Systems

For most people, the weatherization effort focuses on upgrading their heating and cooling systems, ranging from new central air conditioning units and furnaces to newer technologies like geothermal heat pumps and special biomass heat stoves, or even a combination of systems. To be eligible for the federal and local credits, however, they will have to have higher efficiency ratings than before.

Air conditioners are proving to be the main target, in light of advances made in technology and taking into account the price of keeping your old unit, says Neal Arlinghaus, sales manager with Recker & Boerger and a 32-year veteran of the business.

New air conditioners take advantage of more efficient motors, refrigerant gases and other technologies that can boost performance by up to 45 percent over an old unit, taking a large bite out of your electric bill.

“New air conditioners use a new refrigerant gas that’s a lot more efficient and is easier on the ozone, and they have a new kind of compressor that increases efficiency, so they’re much easier on your electric bill than systems even a couple of years old,” Arlinghaus explains.

That new refrigerant, R-410, will also make your old unit tougher to keep. Manufacturers no longer make units that use the old R-22 gas that had been in use since the 1970s, though it will continue to be made until 2020. But as that date nears, the gas will be harder to find and more expensive.

Furnaces, too, have had their advances, but will be easier to qualify for with the credits. The eligibility level has been common for high-end furnaces for a while, Arlinghaus says, but upgrading to an even higher efficiency level has benefits of its own.

“We’ve had 90 (AFUE) furnaces that qualify for the tax credit since the early 80s, so that’s nothing new,” he says. “But most of the new furnaces have about a 25 percent increase in efficiency, just through the use of a new, lower-power motor that can reduce the electrical cost of running your furnace by about $30 a month.”

Other, newer technology systems to heat and cool your home are also covered by the tax credit programs.

Heat pumps, which transfer warmth from ambient air, are one super-efficient alternative. During the summer, they remove heat from air inside your house and release it outside. In the winter, they remove warmth from cool air outside and release it inside your home. Because heat pumps merely move heat rather than generate it, they can provide up to four times the amount of energy they consume, and can trim the amount of electricity used for heating and cooling by 40 percent.

Some systems, called “hybrid heat,” use both heat pumps and the more traditional air conditioners and furnaces for even greater efficiency, which Arlinghaus says can cut your heating bill another 30 to 35 percent over just an HVAC system alone.

The newest technology trend in home climate control, however, is the geothermal heat pump. Though the principles of the system can be traced back to the 1800s, geothermal heat pumps are just now gaining widespread use to heat and cool homes. The basics are this: The system extracts heat from the ground or nearby bodies of water and transfers it to your home in the winter. In warmer weather, the pump reverses the process and pulls heat from your home and dumps it outside.

Though installation is expensive — manufacturers estimate it will cost $8,000 for the typical home — its efficiency can be paid off in energy savings in as little as seven to nine years. The higher expense is also offset by a better federal tax credit, which covers 30 percent of the installation fee without the $1,500 limit of the more traditional alternatives.

Taken together, the tax incentives for homeowners to upgrade their systems could be hard to pass up. The energy savings make it doubly so.

“I've been doing this for 30 years,” Arlinghaus says, “and this just may be our Golden Age. Aside from the advances in efficiency the new systems have, the incentives to upgrade are the best our industry has ever seen.”

Doors, Windows and Roofs

Other areas of home improvements covered by the federal tax credit and local programs are the replacement of doors and windows, new insulation throughout your home and roofing repairs, which have the potential to have the largest impact on your heating and cooling bills.

According to U.S. Department of Energy statistics, air infiltration caused by older doors and windows, poor insulation and older roofs can contribute up to 30 percent of energy losses in a typical home. But new replacement windows and doors with better construction and higher insulating values, as well as higher standards on insulation and roofing supplies, can help you cut that loss significantly.

For door and window replacements, the boost comes from new materials used in construction. As opposed to the past, today’s replacements are built to last longer and made with materials that insulate against heat conductance, while they also add value to your home, says Cathy Wempe, vice president of sales and marketing for Forest Park-based AE Door & Window Co.

Over the past decade, manufacturers have begun coating glass with reflective material to hinder sunlight heating during the summer. They’ve also made their doors and windows with better insulating frames and used trapped gases between panes of glass that add to the insulating value, she explains.

The end result is a huge efficiency boost over windows as little as 15 years old.

“There were good windows out there in the past,” Wempe says, “but what was the top-of-the-line 15 years ago is now probably around the least efficient. High efficiency is more common now.”

The tax credits and rebates have spurred a boom in the industry, Wempe reveals, along with extended warranties and, because of the struggling economy, discounts offered by the manufacturers and sales firms.

The most overlooked area of weatherization efforts, however, continues to be the part of the home few homeowners spend much time in — the attic, according to Kevin St. Clair, vice president and operations manager of Ray St. Clair Roofing, based in Fairfield.

Insufficient insulation is usually the culprit.

“New homes, homes built within the past five or 10 years, are insulated well, but we go into older homes that are 15 to 20 years old that were insulated up to U.S. Department of Energy standards at the time. They aren’t even close to today’s standards,” says St. Clair, whose grandfather founded the business in 1954. “We go into some homes and there’s no insulation at all.”

Improved insulation materials, including fiberglass, cellulose and foam insulation, have higher “R values” — meaning they’re better insulators — than ever before, he points out, so it takes even less of the materials to improve your home’s efficiency.

And that makes it an even better bargain.

Other Financial Resources

Though the federal and state tax credits have grabbed the majority of headlines, other less-heralded financial resources are also available for homeowners considering weatherization improvements.

For lower-income families, both the state of Ohio and Duke Energy have energy assistance plans that include services ranging from free assessments to help finding energy-wasting flaws in your home to paying for new insulation.

Duke has teamed up with the local nonprofit organization People Working Cooperatively for its Home Weatherization Program that offers free furnace and heat pump cleaning and maintenance, weather stripping, and wall and attic insulation. To qualify, homeowners must be Duke customers and meet income requirements.

Ohio, Kentucky and Indiana provide similar programs to their residents through their individual Home Weatherization Assistance programs funded by the federal Department of Energy.

Another effort on the horizon may provide a more significant impact to Tristate homeowners, however, and without the income requirements.

Last fall, with Ohio Gov. Ted Strickland and Kentucky state officials in attendance, leaders unveiled the Greater Cincinnati Energy Alliance, the brainchild of founder and longtime community activist Andy Holzhauser.

Through an initial investment of $1.6 million by local governments and support of the Greater Cincinnati Foundation, the nonprofit organization’s mission is to realize an energy-efficient Cincinnati, which, beyond the obvious environmental effects, would benefit residents with lower utility bills and businesses with related growth.

“We began by looking at a commonsense way to help the community become more energy efficient with an eye on the environment,” Holzhauser explains, “but this isn’t a tree-hugging concept. It’s good business, with a number of economic benefits for residents, businesses and local governments.”

Trumpeted nationally as a groundbreaking cooperative of local companies, the GCEA is seeking federal grants to help sustain its work. In the meantime, phase one of its effort begins early this year with an information campaign reaching out to local residents.

Volunteers will be going door-to-door educating homeowners on the various tax credits and rebates available to them, while offering free energy audits.

“Consumers are overwhelmed by all the information that’s out there,” Holzhauser says. “It’s tough for anyone to know all the benefits that are out there and how to get them. We can simplify and broker that process. We think a significant number of the population, when they see that the cost of doing it can be recouped in the savings alone in just a few years, will consider doing it.”

The economic impact could be huge. According to federal estimates, as many as 200,000 homes in the area could benefit from weatherization work.

But that initial commercial spark would be nothing compared to the future Holzhauser hopes for, should the group secure additional grant money.

“In the short term, we’re working on funding and education, but we have much bigger plans,” he says.

Additional funding would enable the organization to become self-sustaining, Holzhauser explains, which would allow the GCEA to not only serve as an advocate for energy efficiency projects, but to finance those projects, as well.

“Eventually, we’d like to be able to make a $4,000 to $6,000 investment in each home to make Cincinnati energy efficient,” he says.