"Show Me the Money!" (aka, Energy Tax Credits)

More has happened in President Obama’s first 50 days than happens in other Presidents' 4 years. A whirlwind of spending measures has pumped a dizzying amount of money into the US economy.

Like you, I’ve been saying, “Show me the money!" So, where’s YOUR stimulus check? When can you expect to see the benefits?

The simple answer is, "When you build, or rebuild, something green."

As a green architectural designer it’s my job to answer these questions. And the best place to look is in the horse’s mouth – the Federal Government’s own websites.

The Energy Star program, created by the US Environmental Protection Agency and the US Dept. of Energy, offers consumers plenty of information about incentivising green building by way of tax credits. They are encouraging homeowners and home builders to install "energy- and environmental-wise" building supplies, products, and processes that will protect the environment and reduce energy use. This in turn will reduce your utility bills now, as well as clean up the environment and reduce global warming later.

But in order for all this to happen, it’s key to understand the details of the Stimulus bill’s financial benefits. Here’s what it means for you in three easy-to-read FAQs:

Question: How has the new Stimulus bill affected the tax credits for energy efficient home improvements?
Answer: On February 17, 2009, President Obama signed a stimulus bill (The American Recovery and Reinvestment Act of 2009) that made some significant changes to the energy efficiency tax credits. The highlights are:
• The tax credits that were previously effective for 2009, have been extended to 2010 as well.
• The tax credit has been raised from 10% to 30%.
• The tax credits that were for a specific dollar amount (ex $300 for a CAC), have been converted to 30% of the cost.
• The maximum credit has been raised from $500 to $1500 for the two years (2009-2010). However, some improvements such as geothermal heat pumps, solar water heaters, and solar panels are not subject to the $1,500 maximum.
• The $200 cap on windows has been removed, but the requirements for windows has been increased significantly. Not all ENERGY STAR qualified windows will qualify.


Question: What products are eligible for a tax credits for energy efficient home improvements?
Answer: On February 17, 2009, President Obama signed a stimulus bill (The American Recovery and Reinvestment Act of 2009) that made significant changes to the energy efficiency tax credits.

Tax credits are available at 30% of the cost, up to $1,500 total, in 2009 & 2010 (for existing homes only) for:
• Windows and Doors
• Insulation
• Roofs (Metal and Asphalt)
• HVAC
• Water Heaters (non-solar)
• Biomass Stoves

Tax credits are available at 30% of the cost, with no upper limit through 2016 (for existing homes & new construction) for:
• Geothermal Heat Pumps
• Solar Panels
• Solar Water Heater
• Small Wind Energy Systems
• Fuel Cells

Question: I want to build my own home, can I qualify for any of the tax credits?
Answer: A 30% tax credit (including labor and installation), with no upper limit, is available for consumers building new homes (through 2016) for:
• Photovoltaics
• Solar Water Heaters
• Geothermal Heat Pumps
• Small Wind Energy Systems
• Fuel Cells

To qualify for the fuel cell credit, the new home you are building must be planned as your principle residence. The credit for photovoltaic, solar water heaters, geothermal heat pumps, and small wind energy systems does not have to be for your principal residence; so, rental units, second homes, etc... are all eligible. See the Instructions attached to 2008 IRS Form 5695 to help you further with this provision.

The tax credit for these products is ONLY available for existing homes:
• Windows/Skylights
• Doors
• Insulation
• Roofs (metal and asphalt)
• HVAC
• Water Heaters (non-solar)
• Bio-mass Stoves

There is a $2,000 tax credit for building a new energy efficient home, but it is ONLY available to "eligible contractors"; therefore, owner/builders may not receive the builder tax credit unless employed as eligible contractors. Home builders who qualify as eligible contractors are eligible for the $2,000 tax credit for a new energy efficient home that achieves 50% energy savings for heating and cooling over the 2004 International Energy Conservation Code (IECC) and supplements. At least 1/5 of the energy savings must come from building envelope improvements. There is also a $1,000 tax credit to the builder of a new manufactured home achieving 30% energy savings for heating and cooling over the 2004 IECC and supplements (at least 1/3 of the savings must come from building envelope improvements), or a manufactured home meeting the requirements established by EPA under the ENERGY STAR program.

Remember, if you chose build your own home and act as your own general contractor and hiring subcontractors yourself you still need a professional set of architectural plans. The local building department still hasn't warmed up to approving sketches on a napkin. Be sure to call a qualified green designer, like Eccolo Design.