| Federal Tax Credits Available for Solar and Energy Efficiency
Energy Efficiency Improvements for Existing Homes
These provisions offer cost-based incentives of 10% of the amount expended by the taxpayer for "Qualified Energy Efficiency Improvements," up to $300 for "Qualified Energy Property." The maximum credit limit per home is $500 for 2006-2007.
"Qualified Energy Efficiency Improvements" are specifically defined as:
- Any insulation material or system specifically designed to reduce heat loss or gain
- Exterior windows (including skylights)
- Exterior doors
- Any metal roof having pigmented coatings specifically designed to reduce heat gain which meet Energy Star program requirements.
"Qualified Energy Property" is defined as:
- Electric heat pump water heater with EF of 2.0 or greater
- Electric air source heat pumps with HSPF of 9.0 or greater
- Geothermal heat pumps:
- Closed loop products with EER of 16.2 and COP of 3.3 or greater
- Open loop products with EER of 14.1 and COP of 3.3 or greater
- Direct expansion (DX) products with EER of 15 and COP of 3.5 or greater
- Central air conditioner that receives the highest efficiency tier established by the Consortium of Energy Efficiency as of January 1, 2006
- Natural gas, propane or oil water heater with EF or 0.80 or greater
- Natural gas, propane or oil furnace or hot water boiler with AFUE of 95% or greater
- Advanced main air circulating fan used in natural gas, propane or oil furnace that uses no more than 2% of the total annual energy use of the furnace.
Credit limitations on qualified energy property are as follows:
- $50 for any advanced main air circulating fan
- $150 for any qualified natural gas, propane, or oil furnace or hot water boiler
- $300 for any item of qualified energy property.
The incentives apply to improvements and equipment placed in service during 2006-2007.
Fuel-Efficient Passenger and Commercial Vehicles
Tax credits are available for a range of vehicles, mainly those with hybrid-electric or diesel engines. Tax credit amounts are based on a complex formula and will be available for vehicles placed in service after January 1, 2006. The credits are available for both passenger and commercial vehicles and will be phased out over time for each auto manufacturer after they sell 60,000 qualifying vehicles. The vehicle tax credits will end for vehicles placed in service after December 31, 2010.
Source: This fact sheet adapted from the Florida Solar Energy Center’s website and the Tax Incentives Assistance Project.
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