Make your home energy efficient to avoid getting ripped off by Appalachian Power

As an Appalachian Power customer living in southwest Virginia, it is frustrating for me to read headlines like “Appalachian Power rate requests result in a 35% increase in bills since 2021” or “Appalachian Power Requests to Increase Revenues by $95 million, or 5.1 Percent” and see what that means for our family’s monthly budget, as well as those of our friends and neighbors.

Areas in Southwest Virginia already suffer from some of the state’s highest rates of energy burden, meaning people who make less pay a higher portion of their income for electricity. Inflation is making it difficult for everyone and now, Appalachian Power wants people to pay more and increase its profits. Challenging conversations are happening around dinner tables, in parks and on the sidelines of little league games and playgrounds all across our region as working people discuss how to make ends meet.

You can weigh in on Appalachian Power’s latest rate increase request by submitting a comment to the State Corporation Commission before Sept. 4. It’s important for the SCC to hear from customers like you about how this rate increase will impact you and your family, but in the meantime, you can soften the blow of ApCo’s rate increases by making a plan to improve the energy efficiency of your home and taking advantage of the tax incentives currently available. That’s what my household is doing.

First, if you are a lower-income individual or household and need immediate emergency assistance on your energy bills in Virginia, contact the Department of Social Services and see if you qualify for a number of energy-related programs — including heating fuel assistance in winter, cooling assistance in the summer months and crisis assistance for other household energy-related emergencies. It’s important to note that these programs will not be counted as income in determining Supplemental Nutrition Assistance Program benefits, public assistance or Medicaid eligibility if you receive them.

There are also low-income energy audits and efficiency programs available in our region that you can receive for no cost, with priority given to households with elderly residents, individuals with disabilities and children. Check with the provider in your area to see if you qualify. Appalachian Power also has some rebate offers and energy-efficiency programs that customers are eligible to receive regardless of income.

For households not in need of emergency assistance, but feeling the frustration and monthly squeeze of increasing energy bills, there are also federal incentives available through the Inflation Reduction Act that will allow you to take advantage of historic levels of tax credits to make your home more energy efficient. Through these tax credits, a homeowner can save up to $3,200 on their taxes annually.

So how can you maximize the available incentives in a way that is most impactful? First, contact a qualified energy professional and get an energy audit. An energy audit is an in-home assessment where a professional will do a number of tests to determine how much air is leaking into or out of your home, look at insulation levels, appliances, HVAC equipment, lighting and a number of other home energy, comfort and air quality issues.

The energy expert will then produce a report on your home with suggestions of how to best reduce your energy bills and improve your home’s livability. This is especially important if you have gas or oil combustion systems in your home like a natural gas furnace or water heater, because too much air sealing can make your home’s indoor air quality unsafe. You’ll be able to claim 30% of the cost of the energy audit as a federal tax credit, up to $150.

Graphic by U.S. Environmental Protection Agency

Next, aggressively work on the highest impact items detailed in your energy audit report. For most homes, the biggest bang for your buck energy-efficiency upgrades are going to be increasing the amount of insulation in your attic, insulating the attic hatch and using caulk or spray foam to seal around the many places that heated or cooled air leaks out of your house.

These gaps occur at places such as in the attic where the walls meet the attic floor, around windows, can lights and any penetrations where wiring, pipes or plumbing enters and exits the house, which are usually in the basement or crawl space. Making sure that you have quality weather stripping around doors is a low-cost and easy DIY project that almost anyone can do. In our household, I’ve completed the air-sealing tasks and am in the process of installing additional R38 — fiberglass —attic insulation. Taking care of these items first, you’ll be able to immediately reduce your home’s energy use and claim 30% of the cost on your taxes, up to $1,200 annually.

U.S. Environmental Protection Agency

After upgrading the air sealing and insulation at your home the next place to look is replacing your home mechanical systems with the most energy-efficient option. Air source heat pumps and heat pump water heaters are higher cost items, but will save you money in the long run and you’ll be able to claim 30% of the cost — up to $2,000 annually— when you file your taxes.

At this point you’d be at the maximum allowable annual energy efficiency tax credit of $3,200. But these tax credits are available through 2032, so replacing the mechanical systems over a number of years will allow you to take maximum advantage of the credits. Additionally, replacing windows and doors with more energy-efficient options will allow you to save a small amount of energy as these are primarily cosmetic upgrades, but they are eligible for a 30% tax credit up to $1,200 annually.

Staging these upgrades over a number of years will allow you to make the most of the tax credits. Below is our household’s plan for how we aim to reduce our energy use and maximize our tax credits. We don’t intend to buy new doors, windows or replace our relatively new heat pump air conditioner, but in the event that we need to replace them we’ll purchase the most energy efficient option and take advantage of the tax credits and any utility rebates.

Finally, after reducing your energy use as much as possible, consider installing solar and battery storage systems at your home. These systems also qualify for a 30% tax credit through 2032 before stepping down to 22% in 2033 and 2034. These systems allow you to produce your own electricity, so no matter how much Appalachian Power raises its rates, you will have a fixed rate on the clean energy you produce. Over the life of the system you might be able to save over $30,000 by installing solar at your home rather than paying that money to the electric utility.

U.S. Environmental Protection Agency

Making your home more energy efficient through air sealing and insulation is a great way to save money on your energy bills immediately and in most cases will pay for itself in just a few years. It is also a way to protect yourself from utility rate increases. Finally, be sure to follow Appalachian Voices so that you can make your voice heard on future rate cases as we work to ensure that utilities in the Appalachians provide you with clean, affordable and reliable energy.

About Matt Allenbaugh

Matt joined App Voices in 2023 as the Virginia Campaign Coordinator. He grew up in rural western Pennsylvania. He attended grad school at Appalachian State University, where he earned an MS and MBA, both related to renewable energy and sustainable business.