New Federal Energy Efficiency Tax Credits Take Effect

[philb]

New Federal Energy Efficiency Tax Credits Take Effect

The energy efficiency tax credits have gone into effect, making it easier for American families and businesses to reduce energy costs at home, work and on the road. The various tax credits designed to improve America's energy efficiency went into effect on January 1, 2006 and are available for the purchase and installation of energy efficient appliances and products, as well as the purchase of fuel efficient vehicles such as hybrids.

"While there are easy, immediate steps that families can take to reduce their energy bills - like turning down the thermostat or weather stripping doors and windows - these tax credits will help with the purchase of bigger ticket items," said Energy Secretary Samuel W. Bodman. "By reducing overall energy demand one family or business at a time we are also increasing America's energy security."

The energy efficiency tax credits will allow consumers to reduce their 2006 tax bills on a dollar-for-dollar basis up to the amount allowed under the law. For example, consumers who purchase the most fuel-efficient vehicles could reduce their tax liability by up to $3,400, while those who install certain products such as energy-efficient windows, insulation, doors, roofs and heating / cooling equipment in the home can receive up to $500 off of their federal tax bills.

Specific tax benefits for the home include:

*$50 for purchasing an advanced main air circulating fan;

*$150 for installing a highly efficient furnace or boiler;

*$200 for installing energy efficient windows;

*$300 for purchasing a highly efficient central air conditioner, heat pump or water heater;

*30 percent, or up to $2000, for the purchase of solar water-heating equipment (this does not apply to equipment used to heat swimming pools or hot tubs).

Businesses may be eligible for credits such as:

*30 percent tax credit for the installation of qualifying solar equipment on buildings;

*Business tax credits for companies that build highly energy efficient homes;

*Credits for companies that manufacture energy-efficient appliances such as dishwashers, clothes washers and refrigerators.

The energy efficiency tax credits were signed into law in August, 2005 as part of the first comprehensive energy legislation in over a decade. The landmark energy bill contains provisions to promote greater energy efficiency and conservation, improve the reliability of electricity delivery, and encourage increased domestic energy production, including energy from renewable sources such as biomass and wind.

Media contact:

Mike Waldron, 202/586-4940

[philb]

1. No one interested in taking advantage of some of these credits?

[4dsc]

2. I'm thinking of solar water heater..

I'm thinking of installing a passive solar water heater on my roof.

[phantom power]

3. That solar hot water credit is very significant. Others...

seem pretty weak. Energy efficient windows are expensive. It would cost thousands of bucks to upgrade the windows on a typical house. $200 bucks doesn't seem like much of an incentive against that kind of up-front cost.

[philb]

4. wonder if its $200 for installing a couple of windows or for whole house?

[philb]

5. in Maine and Wisconsin, there are additional state credits

see Maine thread &

Wisconsin Rebates Coupled with New Federal Rebates
January 6, 2006


Madison, Wisconsin Focus on Energy, Wisconsin's energy efficiency and renewable energy initiative, is helping residents and businesses statewide become more energy independent in 2006 and beyond. The Renewable Energy Program is offering Cash-Back Rewards and zero-interest loans to help finance the installation of renewable energy systems.

"As electricity prices continue to rise and as the cost of renewable energy systems goes down, it makes sense for Focus on Energy to help people plan, finance and install renewable energy systems," said Don Wichert, program director for Focus on Energy's Renewable Energy Program. "It's our goal to increase the number of Wisconsin residents and businesses using renewable energy, in turn reducing their utility bills and keeping our air and water clean for future generations."

To increase the number of renewable energy systems at work across the state, the Focus on Energy Renewable Energy Program will share the cost of installing these systems with the following financial incentives.

Homeowners and Businesses Can Combine New Federal Tax Credits and Cash-Back Rewards

Focus on Energy's Renewable Energy Program continues to offer Cash-Back Rewards and Grants to Wisconsin residents and business owners for a variety of renewable energy systems. In addition to these incentives, on January 1, 2006, new federal tax credits were made available, making renewable energy systems more attainable than ever.

Wisconsin homeowners can take advantage of the new 30 percent federal tax credit (up to $2,000) between January 1, 2006 and December 31, 2007 when they install a qualifying solar domestic hot water or solar electric system. A similar tax credit exists for business owners when they install a qualifying commercial solar hot water or solar electric system, with no maximum credit cap.

Combined with federal tax credits, Wisconsin residents and business owners can receive a Cash-Back Reward up to 25 percent of the cost of a solar electric (photovoltaic) installation, to a maximum of $35,000. Focus on Energy also offers a Cash-Back Reward for solar domestic hot water systems that can cover up to 30 percent of the project's cost to a maximum of $3,000; for commercial solar hot water systems a Cash-Back Reward up to 25 percent of the project's cost is available, to a maximum of $35,000.

For homeowners, the combination of Focus on Energy Cash-Back Rewards and federal tax credit applies only to solar technology; however, Focus on Energy does have additional Cash-Back Rewards available for homeowners who install a wind system. Furthermore, businesses that install a wind, biogas, or biomass renewable energy project may qualify not only for Cash-Back Rewards, but for business-specific tax credits that cover these additional renewable energy technologies with certain restrictions. Consult your tax advisor for more details.

Zero-Interest Loans

Easy to obtain zero-interest loans are available from Focus on Energy to help homeowners finance the installation of solar domestic hot water systems, solar electric systems and wind systems on existing, owner-occupied one- and two-family homes. The application and approval process is fast and easy. Homeowners can borrow from $2,500 to $20,000 through June 30, 2006; however, funds are limited and are available on a first-come first-served basis. No down payment is required, there is no application fee and no points are assessed at closing. Loan terms vary from three to ten years.

Homeowners and Businesses Statewide Are Eligible

Focus on Energy financial incentives are available for individuals and businesses located in areas served by electric utilities participating in the Focus on Energy Program. Homes and facilities that are "off the grid" (not connected to the local electric system) are also eligible, provided they are located within the service territory of a participating utility.

To learn more about Focus on Energy and its Renewable Energy Program, or to find out if you qualify for financial incentives call 800.762.7077 or visit the organization's web site