THE NEW EFFICIENCY TAX BREAKS

Energy Efficiency Tax Incentives: Changes in Store for 2011
January 10, 2011 (American Council for an Energy-Efficient Economy)

"Last month, President Obama signed into law a tax package that contains modifications and extensions to energy efficiency tax incentives for homeowners, home builders, and appliance manufacturers. Information on all of these energy efficiency tax incentives are accessible on the Tax Incentives Assistance Project (TIAP) Web site so that consumers and businesses can take full advantage of changed federal tax credits for energy-saving technologies and practices.

"The new legislation includes extensions and revisions to three existing federal energy efficiency tax incentives: for manufacturers of energy-efficient appliances, a one-year extension and revisions; for new homes builders, coverage for 2010 and 2011; and for home retrofits, a one-year extension but with significant modifications from the 2010 incentives."

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"For appliances, the tax credits go to the manufacturer, but should be visible to consumers by reducing the cost of qualifying equipment. In 2011, the qualifying levels have been increased, and many of the incentives modified. The credits cover residential refrigerators, clothes washers, and dishwashers. In most cases, the credits are available for the very top efficiency products, typically levels more stringent than will qualify for ENERGY STAR®…

"For new homes, the credit is unchanged from 2009 - a $2,000 incentive to the home builder for homes that use 50% less energy than a home built to the national model building code, and a $1,000 incentive for only manufactured homes if the home either meets ENERGY STAR or uses 30% less energy than national model codes."

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"For existing homes, there are several changes in 2011…[I]n 2011, a homeowner interested in purchasing energy-efficient heating or cooling equipment can only receive a $150 tax credit, down significantly from the credit for 30% of the cost of the equipment that was available in 2009-2010. The efficiency level of eligible equipment is generally unchanged from 2009-2010, with the exception of boilers and oil furnaces…[I]ncentives for windows…have become less generous but easier to qualify for…

"The TIAP Web site has additional details…[and] a tax incentives fact sheet with detailed information about each of the incentives for 2010 and for 2011…"