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Consumer Incentive Clearinghouse Glossary

The Power to Save Is In Your Hands

Everyone likes free money, but mastering another language to get it can drain the fun out of the process. If only someone else would do all that pesky research.

Below are some common terms that can be found in money-saving offers for homeowners. Now you've got no excuse to let the deals pass you by.

The power to save is in your hands

Appliance Efficiency Ratings:

While most home appliances are required to meet a certain level of energy efficiency, you can find products on the market that are better than they have to be. Manufacturers quantify a product's superior efficiency in one of three ways. They offer statistics on:

  • the degree to which the appliance successfully transfers its fuel source to viable work;
  • the annual average energy use in watts or British thermal units; or
  • the average cost of operating the appliance for a year.

Look to compare this information when shopping for energy-efficient appliances.

Building Envelope:

The elements of a building that enclose conditioned space. The walls, roof and foundation of your home are considered the building envelope.

Disaster Insurance:

Insurance policies that cover specific natural threats which are not covered by standard homeowners insurance. These policies include hurricane, flood, earthquake and tornado insurance.

Duct Sealing:

A process of identifying and repairing air leaks in your home's duct system. It is often performed by a licensed contractor but can be approached as a do-it-yourself project. Benefits include a more comfortable, energy-efficient and safer home.

Energy Audit:

A series of visual observations and diagnostic measurements that determine how energy-efficient a home is. An energy audit identifies areas where it would be wise to invest in improvements.

Energy Efficient Mortgage:

An energy-efficient mortgage (EEM) can add an additional 15% of a home's appraised value to the principal of a new loan or a refinance, often at no additional cost, with no compromise in the loan-to-value ratio for the borrower, and sometimes at a better rate. Most mortgages require that the home obtain an energy rating to qualify. A rating typically involves an inspection by a professional energy rater who is certified under a nationally or state accredited home energy rating system. The Residential Energy Services Network (RESNET) provides a database of their Certified Home Energy Raters by state. EEMs can be used to purchase, remodel or refinance a home that will be made more energy efficient through the installation of energy-saving improvements.


A joint program of the U.S. Environmental Protection Agency (EPA) and the U.S. Department of Energy (DOE), which works to help consumers save money and protect the environment by identifying and promoting energy efficient products and practices. ENERGY STAR products must meet strict energy efficiency criteria set by EPA and DOE.


ENERGY STAR qualified homes are at least 15% more energy efficient than homes built to the 2006 International Energy Conservation Code.

Federal Loan Programs:

Programs in which the federal government makes available financing through a direct loan or through low-or no-interest terms for renewable or energy-efficiency improvements.

Fortified...for safer living®:

A certification program of the Institute for Business & Home Safety (IBHS) that establishes a nationwide definition for natural disaster mitigation in new construction and an inspection program to ensure that the required features have been included in the home. The program currently includes requirements for windstorms (hurricanes), floods, wildfires, earthquakes, tornados and hail risks as well. Some insurers have partnered with IBHS to offer homeowners insurance discounts to owners of Fortified Homes.


A grant is a sum of money that is awarded, usually through a competitive selection process, to an organization or individual for a specified purpose. Government grants, for example, are designed to achieve government policy objectives, such as reducing energy consumption. The term is generally used to include any funding arrangement where the recipient is selected on merit against a set of criteria.

Green Building Product:

Green building materials must be either:

  • Made from reused, recycled, rapidly renewable, preferably local, or other environmentally preferable materials;
  • Easily recycled at the end of its life;
  • Free of pollutants harmful to the air or water;
  • Energy efficient, water efficient, resource efficient, or durability enhancing; and/or
  • Effective in minimizing the environmental impact of the building.

Green Building:

Green or sustainable building is the practice of creating healthier and more resource-efficient models of construction, renovation, operation, maintenance, and demolition.

Green Building Programs:

Local or national programs that establish a set of green building requirements, which can be certified by an independent third party.

Homeowners Insurance Premium Discounts:

Incentives offered by some insurers for disaster-resistant homes built with advanced technologies. Discounts tend to be a percentage of the homeowner's premium and, like any other discount, may or may not represent the most competitive offering in your market. Ask your insurance provider if they offer one. (If they don't, you may want to ask why.)

Home Performance with ENERGY STAR:

A comprehensive, whole-house approach to improving energy efficiency and comfort at home, while helping to protect the environment. Locally-sponsored programs are available in some areas that use specially-trained contractors to help homeowners cost-effectively improve their home's energy efficiency.

HVAC System:

The equipment, distribution network, and terminals that provide heating, ventilating, or air conditioning to a building. Systems vary widely in their energy efficiency.

Low-interest Loans:

Loan programs that offer a lower-than-normal interest rate to homeowners who agree to a specified plan of action, such as the installation of renewable or energy-efficient technologies.

Manufacturers' Rebates:

Money-back offers from manufacturers for purchasing a product. Offers tend to be temporary and often can be found on major appliance and home store Web sites.

Passive Solar:

The use of the sun's energy to light, heat and cool living spaces. In this approach, the positioning of the building in relation to the sun or an individual feature of it (such as window placement or the installation of a cool roof) acts to absorb or reject heat and light from the sun. This affects indoor temperatures and lighting, which can lower energy costs. Materials that naturally trap or repel heat and light energy can augment this method. Dark, dense materials such as concrete tend to absorb and hold heat, while light materials such as certain paints and blinds tend to repel it. Passive systems are simple, require little maintenance and use no mechanical systems.

Personal Income Tax Incentives:

Many states offer personal income tax credits or deductions to cover the expense of purchasing and installing renewable energy equipment. Some states offer tax credits up to a certain percentage or dollar amount for this equipment. Allowable credit may be limited to a certain number of years after purchase or installation. Eligible technologies may include solar and photovoltaic energy systems, geothermal energy, wind energy, biomass, hydroelectric, and alternative fuel technologies.

Public Benefit Funds:

Also known as System Benefit Funds, Public Purpose Charges, or Public Good Charges, these are state-controlled funds generated from a small surcharge on each customer's electricity bill and specified contributions from utilities. The surcharge is typically a percentage of each kilowatt hour (kWh) used, though some states (e.g. Pennsylvania) charge a flat monthly fee. The money is earmarked to support energy efficiency and renewable energy projects.

Property Tax Incentives:

Property tax incentives typically follow one of three basic structures: exemptions, exclusions, and credits. The majority of these incentives for renewable energy use a simple model: the added value of the renewable device is not included in the valuation of the property for taxation purposes. That is, if a renewable energy heating system costs $1,500 to install versus $1,000 for a conventional heating system, then the renewable energy system is assessed at $1,000.

Property taxes are collected locally, so some states allow the local authorities the option of providing these property tax incentives. Six states have such provisions: Connecticut, Iowa, Maryland, New Hampshire, Vermont, and Virginia.


Semiconductor devices that convert sunlight into electricity. Groups of photovoltaic cells are electrically configured into modules and arrays, which can be used to charge batteries, operate motors, and to power any number of electrical loads.

Radiant Barrier:

Radiant barriers are materials designed to block the effects of radiant heat gain in homes by reflecting radiant heat rather than absorbing it. They reduce energy use for heating and cooling.

Rebate Programs:

Rebate programs are offered at the state, local, and utility levels to promote the installation of renewable energy equipment. The majority of the programs are available from state agencies and municipally-owned utilities and support solar water heating and/or photovoltaic systems. Eligible recipients include residents and businesses, although some programs are available to industry, institutions, and government agencies as well.


A measure of the capacity of a material, such as insulation, to impede heat flow with increasing values indicating a greater capacity. Each type of insulation has a specific R-value per inch. The higher the R-value, the more effective the insulation will be at keeping your home comfortable. Fiberglass batts have an R-value of about R-3.2 per inch. For a 2x6 wall insulated with fiberglass batts, the R-value would be roughly R-19. Determining the appropriate R-value for your area can help to increase your home's energy efficiency.

Sales Tax Exemptions:

This is an exemption from the state sales tax on the purchase of energy-efficient or renewable energy equipment.

Solar Water Heaters:

Systems ( collectors generally mounted on a roof) that use the sun to either heat water directly or use a heat-transfer fluid to heat water.

State Loan Program:

Loan programs offered by state governments to assist in the purchase of renewable energy equipment and energy-efficient products or improvements. Several technologies and services are eligible. In many states, loans are available to the residential sector. Repayment schedules vary.

Utility Rebate Programs:

Some utilities offer rebates to promote the installation of energy-efficient and renewable energy equipment. The majority of the programs are available from municipally-owned utilities.


The practice of protecting a building and its interior from the elements, particularly from sunlight, precipitation, and wind, and of modifying a building to reduce energy consumption and optimize energy efficiency.


Material such as vinyl, foam, or metal strips installed to seal small cracks around the moving parts of doors and windows. Weather-stripping is designed to block uncontrolled infiltration of cold air through these spaces and sometimes to repel wind-driven rain and moisture. The term weather-stripping is also often applied to caulking, a compound used to fill in joints and cracks in the house exterior.

Content updated on 11/20/2006

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