Energy provisions that you and your clients should know!
November 05, 2009
Energy provisions that you and your clients should know!
The American Recovery and Reinvestment Act of 2009 (ARRA) has several notable provisions.
The good news is that the new law increases the energy tax credit for homeowners who make energy-efficient improvements placed in service in 2009 and 2010. The credit rate is increased to 30% of the cost of all qualifying improvements, and the maximum credit limit is $1,500.
The related, Residential Energy Property Credit, also received an increase. This non-refundable energy tax credit is given to homeowners who install qualified residential alternative energy equipment, such as solar hot water heaters, geothermal heat pumps and wind turbines. The new law removes some of the previously imposed maximum amounts and allows for a credit to equal 30% of the cost of qualified property.
The bad news is that the standards in the new law are higher than the standards in the old law for products that qualify as “energy efficient” for purposes of the tax credit. The new standards apply to building insulation; exterior windows, doors, and skylights; certain central air conditioners; and natural gas, propane or oil water heaters placed in service after Feb. 17, 2009.
Remodelers and homeowners must confirm that manufacturers certify their products to meet these new standards before installing them into homes. Don’t be fooled! Most manufacturers are aware of the new standards and the new certification associated with them, but it is up to remodelers to ensure that products have the latest certification, not the old certification.
*Property purchased before June 1, 2009, (with proof) qualifies for the credit with the old standards, assuming that those products comply with the old standards.