Energy Tax Credits for Remodeling

The American Recovery and Reinvestment Act of 2009 (or economic stimulus bill) has several opportunities for homeowners to save on taxes as well as energy by installing insulation, replacing inefficient windows and upgrading HVAC systems.

Some important changes have taken place that homeowner’s should be aware of.  The tax credits were previously effective for 2009, but have been extended to 2010.  The credit has also been raised from 10% of the cost of materials to 30%.  The cost of labor is not included with the exception for HVAC, bio-mass stoves, water heaters, solar panels, geothermal heat pumps, wind energy systems and fuel cells.  The previous credits that were for a specific dollar amount have been changed to 30% of the cost of materials.  The maximum credit has also been raised from $500 to $1,500 for all improvements made between January 1, 2009 and December 31, 2010.  Some improvements are not limited to the $1,500 maximum or to the tax payer’s principal residence, such as geothermal heat pumps, solar water heaters, and solar panels.  All products must have a Manufacturer Certification Statement to qualify for the credit.

To receive a credit for insulation, the installation must meet 2009 IECC and Amendments requirements.  For exterior windows, doors, and skylights, the units must have a U factor <=0.30, SHGC <=0.30  Please note, the requirements for this tax credit changed significantly June 1, 2009.  Storm windows can also be used for a 30% of cost or up to $1,500 tax credit if they meet IECC requirements in combination with the windows over which they are installed.  Again, the requirements changed June 1, 2009.  An often overlooked credit available is all Energy Star qualified metal and reflective asphalt shingles are eligible for the tax credit.

These credits provide a great opportunity for homeowner’s to affordably upgrade the energy efficiency of their homes now, and realize more savings in the future due to decreased energy consumption.

~ Russell Ives