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Tax Incentives
Energy Policy Act of 2005
The Energy Policy Act of 2005 includes provisions for energy efficiency tax incentives for existing homes. The average American home loses between 10 and 50 percent of its energy through inadequate insulation and inefficient lights and appliances. The energy bill offers consumers tax credits for making energy efficiency improvements in their homes. The incentives for residential energy efficiency include:
1. Thirty percent of the cost, up to $1,500, is available to homeowners for their principal residence for qualified energy improvements installed between January 1, 2009 and December 31, 2010:
- Heating, Ventilating and Air-Conditioning (HVAC) Equipment
- Insulation
- Roofs (Metal and Asphalt)
- Water Heaters (non-solar, for solar see below)
- Windows and Doors
- Biomass Stoves
Qualified improvements must meet minimum efficiencies. For equipment specifications, minimum efficiency requirements and required IRS Tax Form 5695, go to: Energy Star Federal Tax Credits for Energy Efficiency. These benefits expire on December 31, 2010.
2. Thirty percent of the cost is available to homeowners through 2016 for:
- Geothermal Heat Pumps
- Solar Panels
- Solar Water Heaters
- Small Wind Energy Systems
These incentives are available to homeowners for existing homes and new construction. They do not have to be a "principal residence" (vacation homes are eligible). Qualified improvements must meet minimum efficiencies. For equipment specifications, minimum efficiency requirements and required IRS Tax Form 5695, go to: Energy Star Federal Tax Credits for Energy Efficiency.
3. Thirty percent of the cost, up to $500 per 0.5 kW of power capacity, is available through 2016 for a homeowner's principal residence for:
- Fuel Cells
This credit is available to homeowners for an existing principal residence or new construction that will be a principal residence (vacation homes are not included). Qualified improvements must meet minimum efficiencies. For equipment specifications, minimum efficiency requirements and required IRS Tax Form 5695, go to: Energy Star Federal Tax Credits for Energy Efficiency.