Homeowners who make energy efficient improvements to their home or replace outdated appliances may be able to take advantage of several tax credit and rebate programs open now or set to begin in early 2010.
Navigating through these American Recovery and Reinvestment Act programs—some of which are run by the states, by the U.S. Treasury Department (in the form of tax credits), or by the U.S. Energy Department (DOE)—isn’t easy.
Below is Jamb Sessions’ effort to untangle the string of initiatives—with details from Washington, D.C., Maryland, and Virginia provided where possible—to help you maximize the benefit of recent or planned upgrades. (As always, contact your tax advisor for professional advice specific to your situation and click the links below for complete details on each program.)
Appliance Rebate Programs (federally funded but administered by the states)
Information link: http://apps1.eere.energy.gov/news/daily.cfm/hp_news_id=200.
State energy offices will administer a new $296 million federally funded energy efficient appliance rebate program. People who buy certain Energy Star–qualifying products—ranging from central air conditioners to dishwashers to water heaters—can get anywhere from $50 to $250 back, depending on the item, purchase price, and other state-specific details, according to U.S. DOE.
Here’s how much is available for the appliance rebate programs in our area, with brief descriptions of what each jurisdiction is saying about its plans for handing out the money (some figures are rounded; download the state-by-state allocation chart here):
- District of Columbia — $567,845 (D.C. Department of the Environment)
From a notice on DDOE’s website:
“Appliance rebates for ENERGY STAR refrigerators, washers, dishwashers and heat pumps are coming in April. If you’d like to be notified when our program begins, please give us your email address below. DDOE promises not to email you for any other reason.”
- Maryland — $5.41 million (Maryland Energy Administration)
From a fact sheet, here is what the MEA says about its appliance rebate program, which is set to roll out in winter/early spring 2010:
“Maryland has proposed a $300 rebate for ENERGY STAR electric heat pump water heaters, a new and very efficient piece of equipment. Stimulus funds will also provide at least $25 for super-efficient clothes washers and refrigerators. Most utilities currently (or will) offer a $50 rebate for ENERGY STAR clothes washers and refrigerators, bringing the total rebate to at least $75. These dollar amounts are subject to change, as our program has not yet been approved [by DOE]. BGE, Pepco, and Delmarva Power currently offer other appliance rebates as well; Allegheny and SMECO will offer rebates beginning in January 2010 … . Allegheny and SMECO programs are not retroactive.”
- Virginia — $7.45 million (Virginia Division of Energy)
This is what VDE says on its website about its program:
“DOE is providing to all states and territories allocations of ARRA funds to set up new, or augment existing, energy and water efficient appliance rebate programs. The money is being divided up by state, according to population. Virginia is preparing an application for $7.45 million to supplement existing or new efficient appliance rebate programs managed by utilities and other suppliers of energy and water. The deadline for Virginia’s application to DOE is October 15, 2009. Check this page after October 15, 2009 for additional information.”
Barbara Simcoe, state energy program manager with VDE, told Jamb Sessions that “we hope to start [the rebates] in spring of 2010.” She said the state is still working with the federal government to determine the types of appliances that will be included in the program and how rebates will be processed. Simcoe said for some appliances, customers will likely apply for their rebate through utilities; applications for other rebates will probably have to go through the state. However, she said only those appliances or systems purchased on the day Virginia’s program starts will be covered by the rebates.
You can keep tabs on individual state programs—which the federal government is still in the process of approving—on this website, which is updated regularly. So far, D.C., Maryland, or Virginia are not listed as having official start dates for their rebate programs.
Federal Tax Credits for Energy Efficiency
Information link: http://www.energystar.gov/index.cfm?c=tax_credits.tx_index.
Federal Tax Credits for Consumer Energy Efficiency are different from the state appliance rebate program (see a comparison of the two programs here), but also apply to the purchase of energy efficient products or renewable energy systems.
Different credit programs apply, depending on the system installed:
A. Existing homes and principal residences. According to DOE, a 30 percent tax credit for the cost of the following appliances or systems, up to $1,500, is available through December 2010 (click the link above to access more details on each of the qualifying products):
- Biomass stoves
- Heating, ventilating and air conditioning
- Insulation
- Roofs (metal and asphalt)
- Water heaters (non-solar)
- Windows and doors.
B. Existing homes and new construction. Two programs that do not expire until December 2016 are designed to reward homeowners who install advanced energy efficient products and systems.
One program, which has no upper limit, provides a 30 percent tax credit for the cost of these items:
- Geothermal heat pumps
- Small residential wind turbines
- Solar energy systems (read about Maryland's solar energy program here).
Another program provides a tax credit of 30 percent of the cost, up to $500 per 0.5 kilowatt of power capacity, for the purchase of residential fuel cells and microturbines.
This frequently asked question document provides homeowners with information on claiming the credit, including how to fill out the IRS forms, such as Form 5695. The IRS counts the credit when the product is “placed in service”—installed and ready to use—so something purchased in 2009, but installed in 2010, would not go on 2009 tax returns. (Here is additional information on carrying credits over from year to year; consult the top-10 FAQs here.)
More Resources
Click on our Ideas Showcase to download a brief fact sheet that reviews these programs.
Here are links to other websites with more information:
- IRS — Energy Incentives for Individuals in the American Recovery and Reinvestment Act, http://www.irs.gov/newsroom/article/0,,id=206875,00.html
- U.S. DOE — State Energy Efficient Appliance Rebate Program,
http://apps1.eere.energy.gov/news/daily.cfm/hp_news_id=200, and state energy office contacts,
http://apps1.eere.energy.gov/state_energy_program/seo_contacts.cfm.
- U.S. DOE — ARRA Weatherization program, http://apps1.eere.energy.gov/weatherization/recovery_act_faqs.cfm.