Six energy efficiency tax credits set to expire soon (updated)

| by David Serchuk
Six energy efficiency tax credits set to expire soon (updated)

One of the great incentives for buying energy efficient home appliances and features is that some qualify for tax credits, making the cost of purchase far more affordable.

But credits can expire. These six federal tax credit categories below are scheduled to expire Dec. 31, 2013. (Editor's Note: The credits were initially set to expire Dec. 16, 2013, but have been moved back.)

To qualify for these credits the items purchased must be used in an existing home, and this home has to be your principal residence. New construction and rentals do not qualify, according to the Environmental Protection Agency’s Energy Star program. For more information read here.

1.       Biomass stoves. Tax credit: $300. These stoves burn biomass fuel to heat a home or heat water. Biomass fuel includes agricultural crops and trees, wood and wood waste and residues (including wood pellets), plants (including aquatic plants), grasses, residues, and fibers. To qualify for the credit these stoves need a thermal efficiency rating of at least 75%.

2.       Heating, Ventilating, Air Conditioning (HVAC).

          a.       Advanced Main Air Circulating Fan. Tax credit: $50. This is an efficient fan, or blower motor, which blows the air that your furnace heats up through the duct system. To qualify for the credit it must use no more than two percent of the furnace’s total energy.

          b.      Air Source Heat Pumps. Tax credit: $300. Heat pumps offer an energy-efficient alternative to furnaces and air conditioners in moderate climates. Like your refrigerator, heat pumps use electricity to move heat from a cool space into a warm, making the cool space cooler and the warm space warmer. During the heating season, heat pumps move heat from the cool outdoors into your warm house; during the cooling season, heat pumps move heat from your cool house into the warm outdoors. Because they move heat rather than generate heat, heat pumps can provide up to four times the amount of energy they consume.

          c.       Central Air Conditioning. Tax credit: $300. Ask your contractor for the best tax credit eligible CAC options. To verify tax credit eligibility, ask your HVAC contractor to provide the Manufacturer Certification Statement for the equipment you plan to purchase. Or, search the manufacturer's website.

          d.      Gas, propane, or oil hot water boiler. Tax credit: $150. These are heating units that use water circulated throughout the home in a system of baseboard heating units, radiators, and/or in-floor radiant tubing.

          e.      Natural gas, propane, or oil furnace. Tax credit: $150. A furnace uses the combustion of fuel and air to create heat.

3.       Insulation. Tax credit: Ten percent of the cost, up to $500. Typical bulk insulation products can qualify, such as batts, rolls, blow-in fibers, rigid boards, expanding spray, and pour-in-place. Products that air seal (reduce air leaks) can also qualify, as long as they come with a Manufacturers Certification Statement, including: weather stripping, spray foam in a can, designed to air seal, caulk designed to air seal, House wrap. The tax credit does not include installation costs. But, you can install the insulation/home sealing yourself and get the credit.

4.       Roofs (metal and asphalt). Tax Credit Amount: Ten Percent of the cost, up to $500. Requirements: "Metal roofs with appropriate pigmented coatings" and "asphalt roofs with appropriate cooling granules" that also meet ENERGY STAR requirements. Tax Credit does not include installation costs.

5.       Water Heaters (non-solar):

          a.       Gas, oil, propane water heater. Tax credit: $300. Water heating can account for 14 percent to 25 percent of the energy consumed in your home. Requirements: Energy Factor ≥ 0.82 OR a thermal efficiency of at least 90%.

          b.      Electric heat pump water heater. Tax credit: $300. Requirements: Energy Factor ≥ 2.0.

6.       Windows, doors and skylights: Tax credit: Ten percent of the cost, up to $500, but windows are capped at $200. Requirements: Must be ENERGY STAR qualified. You do not have to replace all the windows/doors/skylights in your home to qualify. And it doesn't need to be a replacement either—installing a new window where there wasn't one previously (like in an addition) qualifies. Tax credit does not include installation costs.

Topics: Appliances, Energy Star, Geothermal Heating & Cooling, Going Green, Heating & Cooling, Rebates / Tax Credits, Roofing, Water Heaters, Windows

Companies: Energy Star

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