Washington, D.C. — 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.
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 refrigerators, the incentives are $150 for a refrigerator that uses 30% less energy than federal minimum efficiency standards and $200 for a refrigerator that uses 35% less energy. For clothes washers, the incentive is either $175 for units that moderately exceed ENERGY STAR or $225 for the very highest levels of efficiency on the market. For dishwashers, the credits range from $25 for a unit that meets the July 2011 ENERGY STAR-level of 307 kWh per year to $75 for a unit that uses less than 280 kWh per year.
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.
For existing homes, there are several changes in 2011. For example, in 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, which have to meet a higher level of efficiency.
Another example of the 2011 changes is the incentives for windows, which have become less generous but easier to qualify for. In 2011, these tax credits are limited to 10% of the material cost, up to $200. The efficiency requirement, however, has been changed to ENERGY STAR windows, a more lenient eligibility level, especially for homeowners in the South.
The TIAP Web site has additional details on the changes to the building envelope, heating and cooling equipment, new homes builder, appliance manufacturer, and other federal energy tax incentives that were extended in December. In addition, a tax incentives fact sheet with detailed information about each of the incentives for 2010 and 2011 is also available.