Energy Star Tax Benefits Energy Star Tax Benefits

Energy Star is a government program designed to encourage people to buy energy efficient products. A combination of the EPA (Environmental Protection Agency) and the Department of Energy, Energy Star offers rewards for people who save energy. So far, this program appears to have been a success: in 2008, people saved energy which equals around 19 billion dollars in fuel bills, and cut greenhouse gas use by the equivalent of 29 million vehicles.

Energy star can also be used by businesses. The Energy Star program offers established energy management methods that can measure existing energy use, offer ways of making savings and set goals, and reward improvement. For the homeowner, Energy star offers great resources, as well as benefits in the forms of tax credits.

Tax Benefits with Energy Star

Tax credits available with energy star can help homeowners to save money, and lower their tax bill. Customers that put in certain kinds of improvements that have been established as energy efficient will receive Home Energy Efficiency Improvement Tax Credits, while those who install solar or wind systems will get Residential Renewable Energy Tax Credits.

Installing items such as Biomass stoves, HVAC, insulation, roofs with metal coatings or asphalt cooling granules, and ENERGY STAR certified windows, skylights and doors will receive 30% tax credit, off of as much as $1, 500 spent on improving the home using these methods. This tax credit will not include the installation of insulation, or metal and asphalt roofs, for example, but will include installation on items such as the biomass stove and HVAC systems.

For those wishing to go further, tax credits are available on homes with Geothermal heat pumps, small wind turbines, and solar energy systems, up to 30% of total costs with no upper limit. The heat pumps use heat from below the ground to produce electricity, and installation cost is included. Wind turbines should have a capacity of less than 100 kilowatts, but the tax credits will cover installation on these items. Solar water heaters must be used to heat water in the house, not for polls or hot tubs, but credits will meet installation costs. Solar panels must likewise produce energy for the home.

A third section of tax credits available are those relating to fuel cells and microturbines. This will pay up to 30% of costs up to a limit of $500. Fuel cells offer a cleaner, efficient energy production alternative to fossil fuels, meaning that using these systems cuts down on the production of greenhouse gasses. To qualify for tax credits for these items, the fuel cell must have 30% efficiency, and produce at least 0.5 kilowatts of power.

Not all products that are approved by Energy Star will qualify for tax credits so check your purchases before applying. Energy Star, will, for example, judge some energy efficient items as producing long-term savings on energy costs, so tax credits are not available for these products. Before considering installing any energy efficient product, you should calculate whether you can afford to pay for this item without receiving tax credits. Only buy if you are genuinely committed to using the product.



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