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Consumer Energy Tax Incentives
What the American Recovery and Reinvestment Act Means to You
The American Recovery and Reinvestment Act of 2009 extended many consumer tax incentives originally
introduced in the Energy Policy Act of 2005 (EPACT) and amended in the Emergency eligible for tax credits.
About Tax Credits
A tax credit is generally more valuable than an equivalent tax deduction because a tax credit reduces tax dollar-
for-dollar, while a deduction only removes a percentage of the tax that is owed. Consumers can itemize
purchases on their federal income tax form, which will lower the total amount of tax they owe the government.
Fuel-efficient vehicles and energy-efficient appliances and products provide many benefits such as better gas
mileage –meaning lower gasoline costs, fewer emissions, lower energy bills, increased indoor comfort, and
reduced air pollution.
In addition to federal tax incentives, some consumers will also be eligible for utility or state rebates, as well as
state tax incentives for energy-efficient homes, vehicles and equipment. Each state’s energy office web site may
have more information on specific state tax information.
Below is a summary of many of the tax credits available to consumers. Please see the ENERGY STAR® page on
Federal Tax Credits for Energy Efficiency for complete details.
Home Energy Efficiency Improvement Tax Credits
Consumers who purchase and install specific products, such as energy-efficient windows, insulation, doors, roofs,
and heating and cooling equipment in existing homes can receive a tax credit for 30% of the cost, up to $1,500,
for improvements "placed in service" starting January 1, 2009, through December 31, 2010. See Energy Star.gov
for a complete summary of energy efficiency tax credits available to consumers.
Residential Renewable Energy Tax Credits
Consumers who install solar energy systems (including solar water heating and solar electric systems), small wind
systems, geothermal heat pumps, and residential fuel cell and micro turbine systems can receive a 30% tax credit
for systems placed in service before December 31, 2016; the previous tax credit cap no longer applies.
Energy Tax Incentives |
