President Obama's Energy Plan

January 21, 2009  (Department of Energy)

    President Barack Obama in his inaugural address called for the expanded use of renewable energy to meet the twin challenges of energy security and climate change.  As the president was being sworn in, the newly revised White House Web site went live, and it prominently features President Obama's agenda for energy and the environment. The president's "New Energy for America" plan calls for a federal investment of $150 billion over the next decade to catalyze private efforts to build a clean energy future. Specifically, the plan calls for renewable energy to supply 10% of the nation's electricity by 2012, rising to 25% by 2025. The plan also calls for deploying energy efficiency, including the weatherization of one million homes each year. The plan sets a target of placing one million plug-in hybrid cars on the road by 2015.  To help meet the plug-in hybrid goal, the plan calls for a new $7,000 tax credit for those who purchase advanced vehicles. See the president's New Energy for America plan on the White House Web site.

Federal Tax Credits Return for Efficiency Improvements to Homes

January 7, 2009  (Alliance to Save Energy)

    As you're ringing in the New Year, it might also be a good time to search your home for air leaks, insufficient insulation, or heating and cooling equipment that needs updating. That's because the start of 2009 has also revived the federal tax credits for energy efficiency improvements to homes. As noted by the Alliance to Save Energy (ASE), federal tax credits are now available for 10% of the cost of insulation, storm doors, and Energy Star-qualified "cool roofs," up to a limit of $500; for 10% of the cost of exterior windows and skylights, up to a limit of $200; for up to $300 on new high-efficiency air conditioners, heat pumps, water heaters, and corn-fueled stoves; and for up to $150 on high-efficiency furnaces and boilers. Those tax credits expire at the end of this year, but there's also a tax credit for 30% of the cost of Energy Star-qualified geothermal heat pumps, up to a limit of $2,000, and that doesn't expire until 2016. For details, see the ASE press release and tax credit Web page.

    As noted by the Solar Energy Industries Association (SEIA), the Emergency Economic Stabilization Act also extended a federal tax credit for 30% of the cost of both residential and commercial solar energy installations, while eliminating a $2,000 cap on the tax credit for residential solar electric installations. The law also established a tax credit for 30% of the cost of residential wind energy systems, fuel cells, and micro turbines, with different caps on each type of system, and all of these clean energy tax credits are good through 2016.

Congress Extends Tax Incentives for Efficient New Homes and Commercial Buildings
January 1, 2009  (Department of the Treasury)

    Congress has passed and President Bush has signed legislation that extends the tax incentives for energy efficient new homes and commercial buildings to January 1, 2010. All of the provisions for the incentives remain the same.  The IRS has issued the rules for the new federal tax credits for residential energy efficiency available under the Energy Policy Act of 2005.

    Under the provision for energy efficient homes, an eligible contractor who constructs a qualified new energy efficient home may qualify for a credit of up to $2,000. The credit is available for all new homes, including manufactured homes constructed in accordance with the Federal Manufactured Homes Construction and Safety Standards.

    To meet the energy saving requirements, a new home must be certified to provide a level of heating and cooling energy consumption that is at least 30 to 50 percent in the case of manufactured homes, and 50 percent for other homes below that of a comparable home constructed in accordance with the standards of the 2004 Supplement to the 2003 International Energy Conservation Code. It must also have building envelope component improvements providing a level of heating and cooling energy consumption that is at least 10 percent below that of a comparable home. Manufactured homes can also qualify for the credit by meeting Energy Star standards. Site-built homes qualify for a $2,000 credit if they reduce energy consumption by 50 percent relative to the International Energy Conservation Code standard. Manufactured homes qualify for a $1,000 or $2,000 credit depending on the level of energy savings achieved.

    This provision offers business taxpayers a deduction of $1.80 per square foot for commercial buildings that achieve a 50% reduction in annual energy cost to the user, compared to a base building defined by the industry standard ASHRAE/IESNA 90.1-2001. Energy costs refer only to heating, cooling, lighting and water heating, since only these uses are within the scope of the ASHRAE standard and within the control of the building designer. Each of the three energy-using systems of the building — the envelope, the heating, cooling and water heating system, and lighting system — is eligible for one third of the incentive if it meets its share of the whole-building savings goal. For publicly owned buildings, there is an interesting provision allowing the credit to pass through to the "person primarily responsible for designing the building."

New construction in an existing building is also eligible for the tax deduction, with one third of the deduction amount for new construction that affects the new energy-using system (such as lighting or heating, cooling and water heating).

Energy Star Residential Water Heaters Available January 1, 2009

December 31, 2008  (Dept. of Energy)

    DOE announced on December 31 the upcoming release of Energy Star-qualified residential water heaters. Five types of residential water heaters will be released under the Energy Star label: high-efficiency gas storage water heaters; gas condensing water heaters; whole-home gas tankless water heaters; heat pump water heaters; and solar water heaters. Water heating is the second largest energy expense in residential homes, after heating and cooling, and represents up to 15.5% of all national residential energy consumption. These Energy Star-qualified water heaters can reduce residential water heating bills from 7.5% to up to 55%. Over the next five years, the new water heater criteria are expected to save American consumers $823 million in utility costs, avoid 4.2 million tons of carbon dioxide emissions, and achieve cumulative energy savings of more than 3.9 billion kilowatt hours and 270 million therms of natural gas—enough energy to power more than 375,000 homes for a year.

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