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Economics + Finance

What About Those Energy-Efficiency Tax Credits?

The American Recovery and Reinvestment Act of 2009 (ARRA) increases (from $500 in 2007) the energy tax credit for homeowners who make energy efficient improvements to their existing homes, raising the amount to 30% or up to $1,500 toward qualifying improvements placed in service in 2009/2010.

What About Storm Windows?

I know I'm supposed to be using storm windows/doors with my historic house, but I've heard rumors that they don't qualify.
Here are some answers from Adrian Scott Fine of the National Trust for Historic Preservation.

Q: Do storm windows/doors qualify for the $1,500 tax credit?
A: YES!
This chart from the U.S. Department of Energy, Environmental Protection Agency and Energy Star clearly lists storm windows/doors as eligible products for the tax credit.

Q: Are all storm windows/doors eligible?
A: NO.
All eligible storm windows/doors (purchased  6/1/2009–12/31/2010) must have a U-value of 0.30 or lower and solar heat gain coefficient of 0.30 or lower. This is often difficult to assess because the U-value and solar heat gain of storm windows and doors depends on the performance of the existing window in combination with the storm window, which will always be a case-by-case basis. This can only be tested after storm windows/doors are installed and will vary greatly from building to building.

While some manufacturers are marketing their products in conjunction with the tax credit, others are not because the performance standard is difficult to substantiate for all cases. Some are listing classes of exterior windows (single pane, double pane, low-E coating, etc.) that a product may be combined with to be eligible in specific climate zones.

Q: What do I need to claim the tax credit?
A: MANUFACTURER'S CERTIFICATION STATEMENT
A Manufacturer's Certification Statement is a signed statement from the manufacturer certifying that the product or component qualifies for the tax credit. Taxpayers must keep a copy of the certification statement for their records but do not have to submit a copy with their tax return. Some manufacturers are providing these certificates on their website. Other manufacturers are not issuing these certificates as it's difficult to substantiate on a case-by-case basis. Though there are others, two storm window/door manufacturers that do provide certificates are Gorell and Kaufmann.

Federal Energy Efficiency Tax Credits

The 30% federal tax credit is available for homeowners who make energy-efficiency improvements to their existing homes in 2009/2010. Generally, qualifying items must be EnergyStar certified, and include

  • Windows, doors, storm windows and doors
  • Insulation
  • Roofs (metal and asphalt)
  • HVAC systems
  • Water heaters
  • Renewable energy systems (biomass, solar, geothermal, etc.)

Full details are available at energystar.gov/taxcredit.

The National Trust for Historic Preservation's Weatherization Guide offers advice on implementing these items in older homes. (And see below for Preservation Magazine's Weatherizing for Winter video.)

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North Carolina Renewal Energy Tax Credit

The state of North Carolina also offers a 35% tax credit for commercial, residential and multi-family buildings utilizing renewable energy systems. The credit has varying maximum amounts for different technologies and can be carried forward over five years. Qualifying technologies include, among others,

  • Solar space heat, solar hot water, solar thermal electric
  • Photovoltaic
  • Geothermal
  • Biomass
  • Wind

Full details are available online at the Database of State Incentives for Renewables and Efficiency.

The DSIRE website also lists all the NC state and local incentives for renewables and efficiency improvements. 

As always, it is important to consult with your personal tax adviser for advice and assistance with these and all tax-incentive programs. 

Preservation Magazine: Weatherizing for Winter