On February 17, 2009, President Obama signed a stimulus bill (The American Recovery and Reinvestment Act of 2009) that made some significant changes to the federal tax credits for energy efficiency. The Act provides tax credits to individuals and businesses that “place into service” in 2009 or 2010 certain energy efficient products, such as windows, doors, roofs, HVAC, water heaters, geothermal heat pumps, solar panels, solar water heaters, and others.
The highlights of this Act include:
- The tax credits that were previously effective for 2009, have been extended to 2010 as well.
- The tax credit has been raised from 10%to 30%of the cost of the qualifying energy efficiency equipment.
- The tax credits that were for a specific dollar amount have been converted to 30% of the cost.
- The maximum credit has been raised from $500 to $1,500 for the two year period (2009-2010). However, some improvements such as geothermal heat pumps, solar water heaters and solar panels are not subject to the $1,500 maximum.
- If you are building a home, you may qualify for certain of the tax credits (such as for geo-thermal heat pumps, photovoltaics, solar water heaters, small wind systems and fuel cells, but not the tax credits for windows, doors, insulation, roofs, HVAC or non-solar water heaters).
In addition to the federal tax credit, certain energy efficient equipment purchases may also qualify for a rebate from local utility companies. For instance City of Springfield Utilities offers incentives for their commercial customers to increase the efficiency of their facilities. Rebates are available for programmable thermostats, efficient toilets, rain-sensing irrigation equipment and efficient lighting. The City Utilities website includes worksheets that calculate the exact incentive which will be awarded, up to a maximum of $5,000. Go to: http://www.cityutilities.net/conserve/rebates.htm for more information.
City Utilities also offers similar incentives for residential consumers who purchase eligible energy efficiency equipment, including, furnaces, heat pumps, air conditioners, programmable thermostats, building insulation, geothermal heat pumps and routine HVAC maintenance. For example, a five ton qualifying air conditioner could result in a rebate of $500, plus $25 for each SEER above 14. A qualifying natural gas furnace can result in a rebate up to $400. So, if you are looking to make your business or home more efficient, want to protect the environment, or are just in need of a new air conditioner or furnace, you should look into the tax incentives and rebates available for your purchase. CECB can assist you in navigating the myriad of forms that will need to be completed in connection with these incentives.