As part of the historic “bailout” legislation passed this month, Congress extended the tax credits that were rolled out in the Energy Policy Act of 2005 — including $–-$300 credits for efficient furnaces, boilers, air conditioners and water heaters.
The package also includes a 10% credit for the cost of home insulation, exterior doors and energy star windows (up to a max of $200 for windows and $500 for the others).
If you are considering installing solar hot water or electricity in your home, the credit is 30% of the cost with no upper limit. (Prior to this legislation, the solar credit was limited to a maximum of $2,000.)
Tax credits are more valuable than deductions because a credit is subtracted from the amount of tax you pay (rather than your gross income). So these credits provide some great incentive to make the efficiency upgrades you’ve been thinking of.
I was able to take advantage of the earlier credits in 2007 when I had new Energy Star windows installed in my home. The result was a $200 savings on my 2007 taxes — a pretty nice bonus!
The credits go into effect on Jan. 1, 2009 and apply to upgrades and purchases installed after that date. More information about the new credits can be found at www.energytaxincentives.org.
If you’re just beginning to think about improvements to make your home more energy efficient, you might want to consider having a home energy audit. Energy auditors take a comprehensive look at your home to identify where the house is losing energy, the efficiency of your home’s heating and cooling systems as well as ways to conserve hot water and electricity. Maine State Housing Authority maintains a list of certified energy auditors in the state. And be sure to look for money-saving coupons for energy auditors in the 2008 and 2009 editions of the SunriseGuide.
Heather Chandler is the publisher of the SunriseGuide, a locally-published resource guide and coupon book about healthy & eco-friendly living in Southern Maine. Online at www.thesunriseguide.com.