How To:

Get Tax Rebates on Energy-Efficient Products!

1. Rebates from individual states on High Efficiency Heating Systems
2. National Home Energy-Efficiency Improvement Tax Credit Bill

• Rebates from individual states on High Efficiency Heating Systems

  Over the past 10 years, the national Database of State Incentives for Renewable Energy (DSIRE) has become the one-stop source of information on government and utility renewable energy incentives and policies. DSIRE has now expanded to include state and federal incentives for energy efficiency upgrades, purchases of energy efficient products or systems and construction of new energy efficient buildings.

  Consumers, businesses and government facility managers, as well as policymakers and industry stakeholders can benefit from this easy-to-use, free resource, complete with incentive details, links to program websites, legislation and contacts.

  Incentives include:

  tax credits and deductions
  rebates
  low-interest loans
  grants
  property tax exemptions
  sales tax exemptions
  bond programs
  

  Users can search for efficiency incentives by state, technology (lighting, insulation, etc.), incentive type (tax credit, rebate, etc.) and other criteria.

  Coming Soon: Utility efficiency incentives as well as state and federal regulatory policies that promote the use of energy efficient technologies or building practices will be added later in 2006.

  Established in 1995, DSIRE is an ongoing project of the Interstate Renewable Energy Council, managed by the NC Solar Center and funded by the U.S. Department of Energy.

  For More Info, Visit http://dsireusa.org/.

• National Home Energy-Efficiency Improvement Tax Credit Bill

  What is the tax credit?

  Purchasers of highly efficient heating, cooling, and water heating equipment can take tax credits of up to $300 for purchasing qualifying equipment, as detailed below. These credits are available for systems placed in service from January 1, 2006, through December 31, 2007. There is a $500 cap on the credit per home, including the amount received for insulation, windows, air and duct sealing as described in the previous section.

  What types of equipment qualify and for how much?

  High-efficiency gas, oil, and propane furnaces and boilers: $150
  High-efficiency central air conditioning units, including air-source and ground-source heat pumps: $300
  High-efficiency fans for heating and cooling systems: $50
  High-efficiency water heaters, including heat pump water heaters: $300
  

  Where must the equipment be used?

  Exact rules will be developed by the IRS. Our understanding is that equipment is eligible if installed in a new home or an existing home used as the taxpayer’s principal residence. If installed in a new home, the IRS likely will not allow the taxpayer to “double-dip” with the new homes credit; however, if the builder qualifies for the new home credit without the use of the efficient furnace, air conditioner, or water heater, the home buyer likely may take the additional credit.

  What are the efficiency requirements to qualify for the credits?

  Manufacturers and retailers should be able to help you tell whether a specific product qualifies.

  The qualification specifications are:

  Furnaces and boilers: Annual Fuel Use Efficiency (AFUE) 95 or higher
  Fans for heating and cooling systems: fan uses no more than 2% of total heating system energy use, as defined by DOE test procedure. For more information, see: www.gamanet.org
  Water heaters:
  Gas or propane water heaters—Energy Factor of at least 0.8. The only models that meet this standard currently are tankless water heaters and some systems that combine both space and water heating.
  Heat pump water heaters—Energy Factor of at least 2.0

  What do I need to do to qualify for the incentives?

  Details will be spelled out in the IRS rules and forms. We will post a link as soon as this information is published. At a minimum taxpayers will need information on when the equipment was placed in service and information on the efficiency of the equipment in order to demonstrate that the equipment meets the qualification criteria.

  For More Information:

  Department of Energy - Tax Breaks
  Department of Energy - New Energy Efficiency Tax Credits Take Effect
  Energy Tax Incentives
  IRS - Highlights of the Energy Policy Act of 2005 for Individuals

  Where can I find out more about qualifying products?

  Furnaces and boilers: Information on qualifying equipment can be found at:
  www.energystar.gov/index.cfm?c=furnaces.pr_furnaces
  www.energystar.gov/index.cfm?c=boilers.pr_boilers
  www.eere.energy.gov
  www.aceee.org/consumerguide/topfurn.htm
  www.gamanet.org

  Central Air Conditioning Units and Heat Pumps: Information on qualifying equipment can be found at the Consortium for Energy Efficiency (for air conditioners and air-source heat pumps) and Energy Star (for ground-source heat pumps) web sites. ACEEE has general information as well as a list of the most efficient products. DOE also has general information:
  www.ceehvacdirectory.org (look for equipment meeting the "Advanced tier")
  www.energystar.gov (ground-source heat pumps)
  www.aceee.org/consumerguide/topcac.htm
  www.eere.energy.gov (heat pumps)
  www.eere.energy.gov (cooling systems)
  www.geoexchange.org (ground-source heat pumps)

  Fans for Heating and Cooling Systems:See the Gas Appliance Manufacturers Association (GAMA) Directory (units with an "e" have efficient fans) www.gamanet.org
  Water Heaters: Information on which equipment meets the required Energy Factor levels can be found in a directory published by GAMA. More general information can be found on the ACEEE and DOE websites:
  

  www.gamanet.org
  www.aceee.org/consumerguide/topwater.htm
  www.eere.energy.gov