Legislative Update: Extension & Renewal for Federal Energy Efficiency Tax Incentives

Blog | November 12, 2008 - 7:00 pm

On October 3, 2008, the President signed the Economic Stabilization Act into law, extending many of the Energy Efficiency Tax Incentives first enacted in 2005 and creating several new opportunities for taxpayers, including new renewable energy incentives for small on-site wind and geothermal heat pumps among others. The bill pays for the energy efficiency provisions by restricting several oil and gas industry tax breaks, and tightening some provisions on the sale of stocks.

The energy efficiency provisions include:

  • An extension of the commercial buildings tax deduction to the end of 2013.
  • An extension of the tax credit for efficient furnaces, boilers, air conditioners, water heaters and insulation and window upgrades to existing homes (covering improvements installed in 2009, but not 2008).
  • A one-year extension of the new energy-efficient home tax credit, to the end of 2009.
  • Three-years of manufacturer tax credits for sales of high-efficiency refrigerators, clothes washers, dishwashers, and dehumidifiers (2008-2010).
  • A new tax credit for plug-in hybrid vehicles purchased starting in 2008 and extending until shortly after the number of qualifying vehicles reaches 250,000.
  • A new 10% investment tax credit for combined heat and power systems (through 2016).
  • An extension of fuel cell and microturbine credits to the end of 2016.
  • Accelerated depreciation for smart meters and smart grid systems.
  • Extension of an existing bonding program for green buildings and sustainable design, and establishment of a new energy conservation bond program that would help local and state governments to fund energy conservation efforts.

ACEEE is in the process of updating the Web site for the Tax Incentives Assistance Project (TIAP) to reflect these changes, so stay tuned for more information.