Federal energy tax credit: worth your investment?

But this year, he warmed up to the idea of a new wood stove, something he couldn't afford before.

"This year we found out there was a $1500 tax credit and my wife and I said, this is pretty much a no -brainer," Crosier said.

The tax credit is getting a lot of buzz from advertisers these days. Just upgrade your home with energy efficient products. In return, get a tax credit or cash back from Uncle Sam.

"Some people who have been putting it off for years are now saying, 'hey, I can get the $1500 toward the purchase of my stove," said Jeremiah Madden of Matchless Stove & Chimney.

Business was reportedly up at Madden's wood and pellet stove business, he said, because of the tax credit. The credit is good for purchases through 2010.

"Thirty-percent of your purchase up to $1500. So you have to spend $5000 to get $1500 back," Madden explained. 

But dropping thousands of dollars now, even for a tax credit, is a big chunk of change. So how do you know it's worth it?

That's what one Troy family wanted to find out.

"We had really high utility bills," said homeowner Dan Czernecki. "We wanted to do something to lesson them."

They brought in a contractor to do a Home Performance with Energy Star test on their house, for around $300, like testing for leaks with an infrared camera, and making sure the flu gases are moving nicely up the chimney.

It's a program run by the New York State Energy Research and Development Authority, or NYSERDA. The test showed that the attic desperately needs more insulation, at a cost of about $3000. But the energy tax credit saves them $900, and with another 10% back from NYSERDA, the cost is down to $1800.

"We're not having to use our own money and we're paying it back to the bank over three years. That makes it a no-brainer, really," said Dan Czernecki.

As for getting their money back in lower heating costs?

"A good project normally will pay for itself in ten years. You've gotten your money back," said Goodman.

Kevin Crosier also expects to get his money's worth over time, now that his new wood stove is four times more efficient than the last one.

"I will burn about a cord of firewood in this stove for the entire year, because it's so efficient. That's a small price to pay for a big return which the heat that these things generate," he said.

Learn More:

Federal Tax Credits for Energy Efficiency:

http://www.energystar.gov/index.cfm?c=tax_credits.tx_index

NYSERDA:

http://www.getenergysmart.org/SingleFamilyHomes/ExistingBuilding/HomeOwner/Financing.aspx#

Visit www.GetEnergySmart.org and click on Owners of Existing Homes for more information.