Beat the Coming Politically Engineered Home Electrical Cost Surges

By Seth Van Brocklin

President Obama is following through on a vow he made back in 2008. Yes, politicians occasionally keep their promises! But this is one promise you might prefer he’d break.

“Under my plan of a cap-and-trade system, electricity rates would necessarily skyrocket,” Obama said as he rode into power 7 years ago. He has since readjusted his rhetoric. But he hasn’t abandoned his ultimate aim of driving down energy usage by raising costs.

In August, the lame duck President announced radical new restrictions on so-called greenhouse gasses. He wants to require all states to accede to 32% reductions in carbon emissions by 2030. “In finalizing the unprecedented pollution controls, Obama was installing the core of his ambitious and controversial plan to drastically reduce overall U.S. emissions,” reports Reuters.

Congressional Republicans are mostly opposed to the new rules. But they have little hope of stopping them over Obama’s veto pen. Or rolling them back if the Clintons re-take the White House in 2016 (Hillary has voiced support for the regulations).

Billions in Mandatory New Environmental Costs Will Be Passed on to YOU

The Obama administration estimates its new emissions caps will cost $8.4 billion annually. You can bet that will turn out to be a low-ball estimate. The massive new “clean energy” compliance costs borne by power plants will, of course, ultimately be passed on to consumers. In the form of higher utility bills.

The government is moving to counteract the falling costs of coal, oil, gas, and other raw energy commodities. The aim is to deny Americans the full benefits of cheap energy provided by the market so that we will use less energy.

It’s definitely time to consider becoming more energy independent. That doesn’t necessarily entail going off the grid. But you should at least have supplemental backup sources of electricity generation in case the grid goes down or gets too expensive. I am currently pursuing avenues for a more energy-independent lifestyle myself.

Unplugging from the Grid Doesn’t Mean Living Like “Dugout Dick”

I spent much of the month of August in Montana searching for an idyllic log cabin in the woods. I wasn’t sure if I wanted to go off grid. I’m willing to “rough it” to some extent. But I’m not willing to do without electricity, running water, cell phone and Internet access, and other modern conveniences.

On my drive toward Montana through Idaho on Highway 93, I stopped by a roadside historical marker, “Idaho Hermits.” It honors local characters who lived independently, detached from society: “Living for more than 60 years in hand-built ‘dugouts’ across the Salmon river from this site, Richard ‘Dugout Dick’ Zimmerman (1916-2010) came to symbolize the Idaho hermit. With colorful names like Buckskin Bill and Hank the Hermit, these men (and a few women) eked out lonely existences…”

As much as I admire self-reliant frontiersmen who build their own cabins, gather and hunt their own food, collect their own firewood, and shun most modern conveniences, that’s not me. I don’t want to be in survival mode on a permanent basis. Of course, I do want to have survival plans and backup reserves in place in the event of an emergency. I just hope I don’t need to actually employ them!

While I was hesitant to look at off-the-grid properties, what I found when I did is that they don’t entail living a primitive lifestyle. In fact, many large, fully equipped homes in rural areas are off grid. And by fully equipped, I mean full, modern kitchens, washer/dryer, and light switches and power outlets that work just like they do in any home.

Contrary to misperceptions some have, off grid does not mean powered down. A complement of solar panels, gas generators, and battery packs can power a home just as well as a grid connection. Off grid means independence from utility companies, their datagathering Smart meters, and their ever-increasing rates.

Solar Electricity Becomes More Economic

Even as the government is making utility bills artificially high (and higher), it is making the costs of solar panels artificially low. Tax credits, falling production costs, and increasing efficiency for solar panels now make it possible for many homeowners to generate solar power for their homes economically.

Most homeowners that install solar systems remain hooked up to the grid. They draw from the power lines at night and become energy self-sufficient during the day. How much value you can derive from a solar power system depends on how much sunlight hits your solar cells. Not all locations are well-suited for solar installations.

But more and more places are becoming viable as system costs drop. If you checked into solar systems in the past and were put off by the high costs, you might be surprised at how affordable they are now. Prices of solar modules are down 75% just since 2007.

A supplementary solar system can pay for itself in 10 years or less and serve as a long-term hedge against rising utility bills.

As I was perusing Distinctly Montana magazine (Summer 2015), I came across a feature story on how solar power is becoming more attractive in the face of rising conventional electricity costs. It noted that “the EPA’s new Climate Action Plan could accelerate the pricing trend upward” on metered power bills.

Solar Tax Rebates Can Be Lucrative… While They Last

Meanwhile, the government is heavily subsidizing renewable energy upgrades such as solar power panels and solar water heaters. Through 2016, you can receive a tax credit of up to 30% of the cost of installing a home solar system. That’s a direct reduction in your tax burden for the year of your installation. Claim your credit on IRS Form 5695.

Not sure if you’re eligible? Here are the criteria, as described by the U.S. Department of Ener gy: “A taxpayer may claim a credit of 30% of qualified expenditures for a system that serves a dwelling unit located in the United States that is owned and used as a residence by the taxpayer. Expenditures with respect to the equipment are treated as made when the installation is completed. If the installation is at a new home, the “placed in service” date is the date of occupancy by the homeowner. Expenditures include labor costs for on-site preparation, assembly or original system installation, and for piping or wiring to interconnect a system to the home. If the federal tax credit exceeds tax liability, the excess amount may be carried forward to the succeeding taxable year.”

Since the credit is due to expire after 2016, it’s not clear whether carry forwards will be allowable into 2017. Not even the Energy Department can figure out how to interpret the law! It says, “The excess credit may be carried forward until 2016, but it is unclear whether the unused tax credit can be carried forward after then.”

In any case, it’s a good idea to check with a tax specialist before attempting to claim the credit. He or she can help make sure you get every dollar back you’re allowed while surviving IRS scrutiny.