Energy tax credits which lapsed at the end of 2007 were resurrected under authority of a bill passed by Congress and signed into law by President Bush on October 3. The "Emergency Economic Stabilization Act of 2008 reinstates the residential tax credits which were in effect in 2006 and 2007. The law goes into effect on January 1, 2009, but does not cover energy improvements made this year.
Tax credits are available to consumers who purchase and install selected home improvements, heating systems, solar energy systems and fuel cells or who purchase fuel efficient cars. Tax credits are also available to home builders and for improvements to commercial buildings.
The credits are available for replacement windows and doors and storm windows and doors; high efficiency heating and cooling equipment and water heaters and insulation. Credits can also be received for the purchase of energy efficient furnaces, central air conditioning and metal roofs.
These purchases or installations must meet certain specifications and the credits are generally 10 percent of the purchase price (there are a couple of small flat credits) and credits are capped at amounts that are usually in the amount of $100 to $500. The cost of installation cannot be included in the claim.
Larger credits are available for consumers who choose solar water heating, photovoltaic systems and fuel cells (both of which provide household electricity). A credit of 30 percent is allocated for solar systems with a cap of $2,000. Fuel cells can claim a credit of 30 percent of the cost up to $1000 per kW of power that can be produced.
Consumers building a new home do not qualify for components related to the building envelope such as windows, doors, roofs, or insulation but can claim a credit if they opt for photovoltaics, fuel cells, or solar water heating.
A list of covered purchases and installations, information on energy specifications for each, and a guide to information on claiming the tax credits can be found on the Energy Star website at www.energystar.gov.