Much Smaller Residential Energy Incentives Approved
January 1st marked the end of some attractive tax breaks for homeowners who sought to make their homes more energy efficient.
While there certainly were perks for taxpayers, the $858 billion tax bill signed by President Barack Obama in December extended but dramatically cut the dollar amount of tax credits available for energy-efficient home retrofits.
Instead of the maximum tax credit of 30 percent of a project, or up to $1,500, the 2011 credit is 10 percent of a project, or no more than $500. Other restrictions apply, too, like a flat $200 limit for new windows and a $300 limit for the installation of a new water heater. There’s an additional piece of bad news for consumers who were making energy improvements to their homes in phases: Homeowners who already took advantage of the program aren’t eligible for another tax credit.
“The $1,500 was really something that piqued people’s interest,” said Jamie Peters, program manager of the Midwest Energy Efficiency Alliance. “If I was a homeowner and really got into this in 2010, it’d be disappointing that I couldn’t do anything else in 2011.”
A 30 percent tax credit for major projects like the purchase and installation of solar or wind energy systems or geothermal heat pumps continues until 2016, so that segment of the green building market is still on solid ground. In fact, 5,000 to 6,000 solar energy systems are being installed nationally each month, and that momentum is expected to build as the cost decreases, said Mark Burger, president of the Illinois Solar Energy Association.
Others say they think momentum for smaller projects will continue to build as well, despite the smaller tax perks, because the media attention and product manufacturers’ marketing of the tax credit did much to introduce more consumers to the idea of making their homes more energy efficient and less costly to operate.
