The American Recovery and Reinvestment Act of 2009, also known as the federal stimulus package, includes a number of provisions aimed at reducing the amount of money Americans spend on their energy usage by installing energy-efficient upgrades to existing homes.

“Homeowners who plan remodeling projects should know about the tax incentives that went into effect on Feb. 17, 2009,” North Dakota State University Extension Service energy educator Carl Pedersen says.

Improvements that possibly could qualify for the tax credit include replacing or installing new windows, doors, insulation, and heating, ventilating and air conditioning (HVAC) equipment. In addition, biomass stoves, solar energy systems, small wind-fuel cells and certain cars also will qualify for the tax credit.

The U. S Department of Energy and U. S. Environmental Protection Agency’s joint ENERGY STAR program outlines some of the highlights from the legislation on the ENERGY STAR Web site. Those provisions include:

• A tax credit for qualified energy-efficient improvements has been increased from 10 percent to 30 percent of the cost of the improvement.
• The maximum credits have been raised from $500 to $1,500 for the next two years. However, some improvements, such as geothermal heat pumps, solar water heaters and solar panels, are not subjected to the $1,500 limit.

While a large variety of energy-efficient improvements do qualify, determining which ones will qualify is not always simple, according to Pedersen. For example, while all ENERGY STAR-labeled metal or asphalt roofs will qualify for the credit, not all ENERGY STAR windows will qualify. Also, some heating and cooling system components will qualify, but if they are combined with nonqualified components, the entire system is not eligible for the tax credit.

Installation costs such as site preparation and wiring are included for HVAC systems, water heaters, solar panels, geothermal heat pumps, wind energy systems and fuels cells, but installation of windows, doors, insulation or roofs is not eligible.

“Since the tax credit revisions are so new, there is still some confusion as to what is covered, so for more information, consult a qualified tax adviser or an industry professional,” Pedersen advises. “It may not hurt to verify information you receive from two sources.”

To research questions you may have, go to the http://www.energystar.gov Web site and click on the Tax Credits for Energy Efficiency tab. The ENERGY STAR Web site also has a FAQs (frequently asked questions) section that is being updated constantly.

The NDSU Extension Service has a number of resources to help homeowners evaluate their homes for possible energy-efficient improvements. The publication “Insulating to Reduce Heating Costs” describes types of insulation and recommended insulation levels for home in North Dakota.

Another publication, “Determining Air Infiltration and Insulation Levels Using an Infrared Thermometer,” describes the process for determining areas in a home that could benefit from energy-efficient improvements. These publications are available from county Extension offices and the NDSU Extension Service’s energy Web site at http://www.ndsu.edu/energy.

Each of North Dakota’s county Extension offices also has an infrared thermometer that homeowners can borrow to evaluate their homes. The thermometer comes with a questionnaire to help homeowners determine how they can make their home more energy efficient.

For more information on this or any other energy-related topic, contact Pedersen at (701) 231-5833 or carl.pedersen@ndsu.edu.

NDSU Agriculture Communication