Energy-Efficiency Home Improvements Reap Tax Credits

     The rescue packaged approved on Oct. 3, 2008 to stabilize the US financial markets included an income tax credit for consumers to help offset the cost of energy – and money-saving home improvements. Those included a $150 tax credit for propane furnaces and boilers and a $300 tax credit for high-efficiency propane or gas water heaters.
     The Tax Incentives Assistance Project is advising US homeowners of the tax credit, which enables homeowners to lower their energy costs and save up to $500 on their 2009 federal income taxes by making specific energy-efficiency upgrades to their homes.
     Improvements must be installed in 2009. Those undertaken in 2008 are not eligible.
     The legislation extends homeowner tax credits that were first enacted in 2005 but expired at the end of 2007. Taxpayers who did not use the full $500 credit in 2006 or 2007 can use the remaining portion in 2009.

Propane

     Phil Squair, vice president of regulatory and technical services for the National Propane Gas Association (NPGA), says propane marketers will benefit anytime it’s easier for homeowners to upgrade the efficiency of their appliances. As an example, he cited a homeowner with a propane furnace and an electric water heater.
     “I think there are opportunities for the marketer to win that business with a high-efficiency water heater that gets a tax rebate, “ Squair said. “So I think there are some sales opportunities there to build gallons in the residential market.”
     The tax incentives include $150 for high-efficiency gas, fuel oil, and propane furnaces and boilers. For the $300 incentive for gas or propane water heaters, the energy factor must be at least 0.8, or a thermal efficiency of at least 90%. The only models that currently meet this standard are tankless water heaters and some systems that combine space and water heating.
     He noted marketers tell NPGA that many of their customers have a gas furnace and an electric water heater.
     “To the extent that they can win that customer over and into the fold as a propane water heater customer, that’s going to be year-round load – pretty consistent demand- and that’s something that the industry has been trying to do for a long time,” he stated. Squair added that some state water heater rebate programs can provide more incentives for customers to install gas water heaters to go along with gas furnaces.

Additional Incentives

     The program offers incentives for other home energy-saving initiatives in addition to propane:
     · Insulation and sealing products: 10% of the cost, up to $500, for insulation added to walls, ceilings or other parts of the building “envelope,” or shell, and for materials to seal cracks in the shell and to seal ducts to reduce infiltration and heat loss. Installation costs are not eligible for the tax credit.
     · Windows, storm windows, and skylights: 10% of the cost, up to $200, of any new Energy Star-qualified windows (but not installation costs).
     · Exterior doors and window films: 10% of the cost, up to $500.
     · Roofs: 10% of the cost, up to $500, for metal roofs with pigmented coatings or asphalt roofs with cooling granules that meet Energy Star requirements. Again, installation costs do no qualify for a tax credit.

Heating and Cooling Equipment:
     · Central air conditioner, heat pump, water heater, or biomass (such as corn) stove: up to $300 toward the purchase price, including installation costs.
     · Furnaces and boilers: up to $150 for new high-efficiency gas, fuel oil, and propane furnaces and boilers.
     · High-efficiency fans for heating and cooling systems, $50.

The American Council for an Energy-Efficient Economy, the Alliance to Save Energy, and the Natural Resources Defense Council are working with members of Congress to extend the consumer tax incentives beyond the current expiration date of Dec 31, 2009. This will provide continued assistance to taxpayers in defraying a portion of the cost of making their homes more energy-efficient.

     In addition, a new tax credit is effective for 2009 through 2016 for 30% of the cost of an Energy Star-qualified geothermal heat pump, up to $2000. And, under the 2005 legislation, consumer tax credits are still available for some hybrid-electric vehicle models from Ford and General Motors.

     As for the benefits to propane consumers, Squair says people are comfortable with gas for their furnaces, so they should be comfortable with gas for their water heating. “It’s an under tapped market, and anything we can do on a federal level to make it financially attractive for customers to get their water heating done by propane is a good thing,” he commented.

Source: Butane-Propane News March 2009