Renew Tax Credit for Energy Efficiency

EarthTalkEnergyEfficiencyIncentives

EarthTalk®
From the Editors of E/The Environmental Magazine

Dear EarthTalk: A number of federal energy efficiency related tax incentives expired at the end of 2010. Will any such programs remain in force and if not, are there other ways to save money on green upgrades?        -- Jen Franklin, Chicago, IL

It is true that some federal tax credits for energy efficiency upgrades expired at the end of 2010, but there is legislative effort afoot to extend some of those credits—and there are plenty of other ways to defray the costs of turning over a new green leaf or two this year and beyond. 
 
One of the best known green federal tax incentives, the Residential Energy Efficiency Tax Credit—which kicked in 30 percent of the cost of household efficiency upgrades up to $1,500 on items including water heaters, furnaces, heat pumps, central air conditioning systems, insulation, windows, doors and roofs—is no longer available as of January 1, 2011. However, some lawmakers are looking to extend the credit. U.S. Senators Olympia Snowe (R-Maine) and Jeff Bingaman (D-New Mexico) have drafted legislation calling for keeping the program going, in a slightly revised form, for another two years.

“Residential energy efficiency has been identified as the most effective strategy to enhance our energy security and save money on energy bills,” says Snowe. “The residential energy efficiency tax credits…have been key catalysts in improving the energy efficiency of homes throughout the country [and] have driven companies to produce the most advanced products current technology allows…”
 
And if you were thinking you would save thousands of dollars on the price of a Toyota Prius thanks to federal incentives, think again. Federal tax credits also expired at the end of 2010 on the purchase of hybrid gas-electric cars and trucks. However, if you want to roll away in one of the sporty new all-electric cars, such as the Nissan Leaf or Chevy Volt, you can now qualify for up to a $7,500 (depending on battery capacity) federal tax credit. The federal government now also offers a tax credit for 10 percent (up to $4,000) of the cost of a kit to convert an existing hybrid vehicle into a plug-in hybrid.

All of these programs expire themselves at the end of 2011. Whether or not new federal alternative fuel vehicle incentives crop up for 2012—when many new ultra-efficient plug-in hybrids from the likes of Toyota, Honda, Volvo and others are slated for release—remains to be seen.
 
Regardless, many states have their own programs to encourage energy efficiency. The American Council for an Energy-Efficient Economy (ACEEE) regularly updates its free online State Energy Efficiency Policy Database, which makes accessing information on your state’s energy efficiency programs, standards and “reward structures” as easy as clicking on a map. Likewise, the Database of State Incentives for Renewables and Efficiency (DSIRE) is another free online resource that lists state and federal incentives for buying an alternative fuel car, greening up your home or otherwise embracing energy efficiency. And the Energy Star website details special offers and rebates from cities, towns, counties and utilities on the purchase of appliances and equipment that meet federal standards for energy efficiency. 
 
CONTACTS: Database of State Incentives for Renewables and Efficiency (DSIRE), www.dsireusa.org; ACEEE’s State Energy Efficiency Policy Database, www.aceee.org/sector/state-policy; Energy Star Special Offers and Rebates, www.energystar.gov/index.cfm?fuseaction=rebate.rebate_locator.

SEND YOUR ENVIRONMENTAL QUESTIONS TO: EarthTalk®, c/o E – The Environmental Magazine, P.O. Box 5098, Westport, CT 06881; earthtalk@emagazine.com. E is a nonprofit publication. Subscribe: www.emagazine.com/subscribe; Request a Free Trial Issue: www.emagazine.com/trial.

Photo: Both the Chevy Volt or Nissan Leaf (pictured here), qualify for up to a $7,500 federal tax credit (courtesy Nissan).

Post your comment

Comments are moderated. See guidelines here.

Comments

No one has commented on this page yet.

RSS feed for comments on this page | RSS feed for all comments