By Keith Loria
RISMEDIA, January 6, 2011—In December Congress extended and modified energy-efficiency tax incentives for appliances, new homes and retrofits to existing homes. The tax legislation, signed into law by President Obama earlier this year, will continue to help raise the market share of efficient appliances, HVAC and insulation products, as well as new homes.
“For the last few weeks, the Alliance to Save Energy has urged policymakers to remember the pitfalls of not extending these tax incentives—namely, higher energy bills and less disposable income for American families, who are counting on Congress to turn around our still-struggling economy,” said Alliance President Kateri Callahan. “Congress will help Americans keep their homes comfortable and their energy bills low in an unpredictable economy.”
The bill provides several energy efficiency-related provisions and will be in effect for 2011.
Included is a federal income tax credit of up to $500 for homeowners who make certain energy-efficient improvements. This popular energy-efficient home retrofits credit has returned to pre-Recovery Act levels with strengthened eligibility criteria.
For dishwashers, a $25 credit is given for models using no more than 307 kilowatt hours/year and 5.0 gallons of water/cycle. It goes up to $50 for models using no more than 295 kilowatt hours/year and 4.25 gallons of water/cycle; and $75 for those using no more than 280 kWh kilowatt hours/year and 4 gallons of water/cycle.
Clothes washers can get a credit of $175 for top-loading models that meet/exceed 2.2 MEF, and does not exceed 4.5 WCF or $225 for top-loading models that meet/exceed 2.4 MEF, and does not exceed 4.2 WCF, or front-loading models that meet/exceed 2.8 MEF and do not exceed a 3.5 WCF.
For refrigerators, models that use 30 percent less energy relative to the federal standard will receive a $150 credit, while those with 35 percent less energy will receive $200.
There is also limited credit for building materials including insulation, sealing products, certain types of roof and energy-efficient windows at up to 10 percent of their cost. Windows also are subject to a flat $200 limit.
“These incentives have substantially raised the market share of efficient products and new homes, saving consumers money, creating jobs, and helping to make efficient products the long-term norm,” said Steven Nadel, Executive Director of the American Council for an Energy-Efficient Economy.
The bill also contained credits for manufacturers of energy-efficient appliances, a credit that could be claimed for installation of electric vehicle charging stations and an increased maximum value for pre-tax, employer-provided transit benefits.
“The tax incentives adopted are a welcome signal to U.S. consumers, who currently face rising energy costs in a still-uncertain economy, that Uncle Sam will help them pay for energy efficiency improvements to make their homes more comfortable and their energy bills more affordable for years to come,” Callahan said.
While Congress is expected to extend most of the expiring federal energy efficiency tax incentives, it is not extending the incentive for hybrid trucks and buses. This extension had been included in previous House and Senate bills, but was dropped from the final bill.
“While we are happy to see most of the energy efficiency incentives extended, we are disappointed that the hybrid truck incentive is not being extended; we hope Congress will rectify this omission in 2011,” Nadel said.
Congress is expected to consider further extensions of these incentives into 2012 and beyond next year.
For more information about energy efficiency tax incentives, contact us or visit the U.S. Department of Energy website at http://www.energy.gov/taxbreaks.htm.
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