WASHINGTON - This year is a good time for HVAC contractors to remind customers of the dollars they can save by updating heating and cooling equipment, adding insulation, and making other home improvements. That’s because the start of 2009 has also revived the federal tax credits for energy efficiency improvements to homes.

Although the original tax credit expired at the end of 2007, it was revived this year as part of the Emergency Economic Stabilization Act of 2008, which President Bush signed back in October 2008. As noted by the Alliance to Save Energy (ASE), federal tax credits are now available for up to $300 on new high-efficiency air conditioners, heat pumps, water heaters, and corn-fueled stoves; for up to $150 on high-efficiency furnaces and boilers; for 10 percent of the cost of insulation, storm doors, and Energy Star-qualified “cool roofs,” up to a limit of $500; and other credits. These tax credits expire at the end of this year, but there’s also a tax credit for 30 percent of the cost of Energy Star-qualified geothermal heat pumps, up to a limit of $2,000, and that doesn’t expire until 2016. For details, see the ASE’s tax credit Web page at www.ase.org/content/article/detail/2654.

As noted by the Solar Energy Industries Association (SEIA), the Emergency Economic Stabilization Act also extended a federal tax credit for 30 percent of the cost of both residential and commercial solar energy installations, while eliminating a $2,000 cap on the tax credit for residential solar electric installations. The law also established a tax credit for 30 percent of the cost of residential wind energy systems, fuel cells, and microturbines, with different caps on each type of system, and all of these clean energy tax credits are good through 2016. A summary of all the federal tax credits available can be found on the Energy Star Website at www.energystar.gov/index.cfm?c=products.pr_tax_credits.

Publication date:01/12/2009