- Electric heat pump water heaters that yield an energy factor of at least 2.0 in the standard Department of Energy test procedure.
- Electric heat pumps and central air conditioners that achieve the highest efficiency tier established by the Consortium for Energy Efficiency as of Jan. 1, 2009.
- Natural gas, propane or oil water heaters with an energy factor of at least .82 or thermal efficiency of at least 90 percent
- Biomass burning stoves with a thermal efficiency rating of at least 75 percent as measured using a lower heating value
- Natural gas and propane furnaces that achieve an annual fuel utilization efficiency rate of not less than 95
- Natural gas, propane, or oil water boilers and oil furnaces that achieve an annual fuel utilization rate of not less than 90
- Advanced main air conditioning fans with annual electricity use of no more than 2 percent of the total annual energy use of the furnace
- Name and address of manufacturer
- Identification of the class of eligible building envelope component
- Make, model number and any other property identifiers
- A statement that the component is eligible for the credit (may include U factor, class of window or door, etc.)
Among the highlights:
- Tax credit eligible products must be reasonably expected to remain in use for at least five years. One method taxpayers can rely on to satisfy this requirement is to purchase products from a manufacturer who offers a warranty lasting at least two years at no additional cost.
- Not all Energy Star-rated products that are installed qualify for the tax credit. The Energy Star Web site includes a detailed listing of products that qualify for the section 25C program.
- The credit excludes installation costs for building envelope components — such as insulation and windows. In order for the home owner to claim the credit, the remodeler must provide an itemized breakout of the cost of these installed products, minus any labor or installation charges.
Who:
- Rob Dietz, Director of Tax Issues for the National Association of Home Builders
- Greg Miedema, CGR, CAPS, GMB, CGP, NAHB Remodelers Chairman and President of Dakota Builders, Tucson, Ariz.
- Donna Shirey, CGR, CAPS, CGP, President of Shirey Contracting, Issaquah, Wash.
- Michael Strong, CGR, GMB, CAPS, CGP, President of Brothers Strong, Houston
Product Category |
Product Type |
Tax Credit Specification |
Tax Credit |
Notes |
Windows & Doors |
Exterior Windows and Skylights |
U factor <= 0.30 SHGC <= 0.30 |
30 percent of cost, up to $1,5002 |
Not all ENERGY STAR labeled windows and skylights qualify for tax credit. |
Storm Windows |
Meets IECC1 in combination with the exterior window over which it is installed, for the applicable climate zone |
30 percent of cost, up to $1,5002 |
Manufacturer Certification Statement3 will list classes of exterior window (single pane, clear glass, double pane, low-E coating, etc.)4 that a product may be combined with to be eligible in specific climate zones. |
|
Exterior Doors |
U factor <= 0.30 SHGC <= 0.30 |
30 percent of cost, up to $1,5002 |
Not all ENERGY STAR doors will qualify. |
|
Storm Doors |
In combination with a wood door assigned a default U-factor by the IECC1, and does not exceed the default U-factor requirement assigned to such combination by the IECC |
30 percent of cost, up to $1,5002 |
||
Roofing |
Metal Roofs, Asphalt Roofs |
ENERGY STAR qualified |
30 percent of cost, up to $1,5002 |
All ENERGY STAR metal and asphalt roofs qualify for the tax credit. Must be expected to last five years OR have a two-year warranty. |
Insulation |
Insulation |
Meets 2009 IECC & Amendments |
30 percent of cost, up to $1,5002 |
For insulation to qualify, its primary purpose must be to insulate. (example: vapor retarders are covered, insulated siding does not qualify). Must be expected to last five years OR have a two-year warranty |
HVAC |
Central A/C |
Split Systems: EER >=13 SEER >= 16
Package systems: EER >= 12 SEER >= 14 |
30 percent of cost, up to $1,5002 |
For a list of qualified products, go to the Consortium for Energy Efficiency product directory, click on Air Conditioners, then in the “CEE Tier” enter “Residential Advanced Tier 3” for CAC Split Systems, and "Residential Tier 2" for CAC Package Systems and ASHPs. Note — not all ENERGY STAR products will qualify for the tax credit. |
Air Source Heat Pumps |
Split Systems: HSPF >= 8.5 EER >= 12.5 SEER >= 15
Package systems: HSPF >= 8 EER >= 12 SEER >= 14 |
30 percent of cost, up to $1,5002 |
||
Natural Gas or Propane Furnace |
AFUE >= 95 |
30 percent of cost, up to $1,5002 |
For a list of qualifying products go to the Gas Appliance Manufacturing Association Not all ENERGY STAR products will qualify for the tax credit. |
|
Oil Furnace |
AFUE >= 90 |
30 percent of cost, up to $1,5002 |
||
Gas, Propane, or Oil Hot Water Boiler |
AFUE >= 90 |
30 percent of cost, up to $1,5002 |
||
Advanced Main Air Circulating Fan |
No more than two percent of furnace total energy use |
30 percent of cost, up to $1,5002 |
||
Water Heaters |
Gas, Oil, Propane Water Heater |
Energy Factor >= 0.82 or a thermal efficiency of at least 90 percent. |
30 percent of cost, up to $1,5002 |
Not all ENERGY STAR gas storage and gas condensing water heaters will qualify for the tax credit. All ENERGY STAR gas tankless models will qualify. All ENERGY STAR gas tankless water heaters will qualify. For a partial list of qualifying products go to the Air Conditioning, Heating, and refrigeration Institute (AHRI) |
Electric Heat Pump Water Heater |
Same criteria as ENERGY STAR: Energy Factor >= 2.0 |
30 percent of cost, up to $1,5002 |
All ENERGY STAR electric heat pump water heaters qualify for the tax credit. |
|
Biomass Stove |
Biomass Stove |
Stove which burns biomass fuel5 to heat a home or heat water. Thermal efficiency rating of at least 75 percent as measured using a lower heating value. |
30 percent of cost, up to $1,5002 |
|
Geo-Thermal Heat Pump |
Geo-Thermal Heat Pump |
Same criteria as ENERGY STAR:
Closed Loop: EER >= 14.1 COP >= 3.3
Open Loop: EER >= 16.2 COP >= 3.6
Direct Expansion: EER >= 15 COP >= 3.5 |
30 percent of the cost |
All ENERGY STAR geo-thermal heat pumps qualify for the tax credit. Use IRS Form 5695 Must be “placed into service” before Dec. 31, 2016. |
Solar Energy Systems |
Solar Water Heating |
At least half of the energy generated by the “qualifying property” must come from the sun. Homeowners may only claim spending on the solar water heating system property, not the entire water heating system of the household. The credit is not available for expenses for swimming pools or hot tubs.
The water must be used in the dwelling.
The system must be certified by the Solar Rating and Certification Corporation (SRCC). |
30 percent of cost |
All ENERGY STAR solar water heaters qualify for the tax credit. Use IRS Form 5695 Must be placed in service before December 31, 2016. |
Photovoltaic Systems |
Photovoltaic systems must provide electricity for the residence, and must meet applicable fire and electrical code requirement. |
30 percent of cost |
Use IRS Form 5695 Must be placed in service before Dec. 31, 2016. |
|
Small Wind Energy Systems |
Residential Small Wind Energy Systems |
30 percent of cost |
Use IRS Form 5695 Must be placed in service before Dec. 31, 2016. |
|
Fuel Cells |
Residential Fuel Cell and microturbine system |
Efficiency of at least 30 percent and must have a capacity of at least 0.5 kW. |
30 percent of the cost, up to $1500 per .5 kW of power capacity |
Use IRS Form 5695 Must be placed in service before Dec. 31, 2016. |
1Either the 2001 Supplement of the 2000 International Energy Conservation Code or the 2004 Supplement of the 2003 International Energy Conservation Code.
2Subject to a $1,500 maximum per homeowner for all improvements combined.
3A Manufacturer’s Certification is a signed statement from the manufacturer certifying that the product or component qualifies for the tax credit. The IRS encourages manufacturers to provide these Certifications on their website to facilitate identification of qualified products. Taxpayers must keep a copy of the certification statement for their records, but do not have to submit a copy with their tax return.
4Additional information on exterior window features may be viewed at Anatomy of an Energy Efficient Window.
5Biomass Fuel means any plant-derived fuel available on a renewable or recurring basis, including agricultural crops and trees, wood and wood waste and residues (including wood pellets), plants (including aquatic plants), grasses, residues, and fibers.
The IRS defines “placed in service” as when the property is ready and available for use.
This information comes from Energy Star, for more information visit the Energy Star Web site at www.energystar.gov/taxcredits.
To learn more about remodeling visit NAHB Remodelers at www.nahb.org/remodel.
If you would like to search the MLS for listings in San Luis Obispo County,visit my website. If you have any real estate questions or general questions about Paso Robles or San Luis Obispo County, please contact me via email or call me at (805) 235-0234 for more information.
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