Energy efficiency is the cornerstone of our nation's energy policy, providing benefits to the economy, the environment, and national security. The American Recovery and Reinvestment Tax Act of 2009 (ARRA) extends and enlarges energy efficiency tax credits through 2010. Every home owner is eligible to receive 30 percent of the cost of the measures, including installation costs for heating and cooling equipment, but only product costs for windows, insulation, and other parts of the building “shell.” There is a total lifetime cap on the credit amount of $1,500; thus the credit applies to up to $5,000 in total costs.



What energy efficient improvements are eligible?

• Exterior windows: Includes skylights and storm windows.
• Insulation, exterior doors, or roofs: Includes seals to limit air infiltration, such as caulk, weather stripping, and foam sealants, as well as storm doors.
• Central air conditioner, heat pump, furnace, boiler, water heater, or bio gas (e.g. corn) stove: Starting in 2009, geothermal heat pumps are instead eligible for a separate tax credit.

In addition, there are tax credits for geothermal heat pumps, solar photovoltaic cells, solar water heaters, and fuel cells, also modified starting in 2009.

• Geothermal (or ground-source) heat pumps placed in service starting in 2009 are now eligible for a tax credit for 30 percent of the cost, with no maximum. These credits are effective through December 21, 2016. In order to be eligible for the tax credit, geothermal heat pumps must meet Energy Star criteria.
• Solar hot water heating and photovoltaic power systems placed in service by December 31, 2016 are also eligible for the 30 percent credit, as are small wind systems.

For more information on ARRA and tax credits, please see the U.S. Department of Energy