If your New Year's resolutions included a pledge to be more environmentally conscious, then you're in luck. Starting January 1, the Energy Policy Act of 2005 went into effect. The bill, signed by President Bush on August 8, established tax credits for being energy efficient.
According to a report on the Energy Star Web site ( www.energystar.gov) home builders may earn a $2,000 credit for a new home that saves 50% of heating and cooling energy over the 2004 IECC (International Energy Conservation Code) and supplements. At least 1/5 of that savings must be the result of building envelope improvements. A credit of $1,000 is available for a 30% savings under the terms listed above, with 1/3 coming from building envelope improvements. To be eligible, the homes must be built or produced between January 1, 2006 and December 31, 2007.
Homeowners can benefit, too. See the chart below for details of specific improvements that are eligible for the credits. These projects must be completed during the same two-year period as above. Credits for homeowners for those improvements cannot exceed $500 during those two years.
However, a credit of up to 30% — not to exceed $2,000 — is also available for photovoltaic or solar hot-water systems used exclusively for purposes other than heating swimming pools and hot tubs. Homeowners may also get a tax credit (up to 30% of the cost, not to exceed $500 per kW of capacity) for installing a “qualified” fuel cell unit. These additional credits do not count against the $500 two-year cap, and are available through 2008.