The government is worried about our planet and our power grid, and in 2009, a fund was set up with the mandate of giving tax credits for energy efficiency. That program, the American Recovery and Reinvestment Act, is near its end, but that doesn’t mean there are not more credits. Read on to find out about what the American Recovery Act and Reinvestment Act is, and what is left in the pot.
What is the American Recovery and Reinvestment Act?
Established in 2009, the American Recovery and Reinvestment Act aimed to encourage the purchase of new, energy-efficient appliances. [1] It was released in the midst of a recession, and did double duty as an incentive for Americans to go out and stimulate the economy and buy new things. It has also been referred to as the Stimulus or the Recovery Act.
In total, the American Recovery and Reinvestment Act provided $700 billion to try to right the sinking economy. Of that, $237 billion was in tax cuts. Another $4.3 billion of that went toward encouraging energy efficiency in the home. [2]
How Does it Work?
The $4.3 billion was divided among the states based on population. Each state was then given control over how the funds were dispersed. Fortunately, the government has put together a handy search engine to help you see what refunds are available in each state. [3]
Additionally, certain products let you take advantage of tax credits for energy efficiency. While the original tax credit of 30% on up to $1,500 worth of energy-efficient products expired, new tax credits were passed. These aren’t as high, but at 10% on up to $500 worth of goods, it is still a fairly good deal. [4]
Most of the tax breaks focus on slightly obscure items, as all the major items were given tax credits back when the measure started. Now, for example, you can’t get a tax break on an entire furnace, but you can get one for the replacement fan. If you are in the market for a windmill, the government is willing to foot 30% of the bill, with no upper limit on cost. As always, the perennial green favorite, the solar panel, is also given tax credits.
There are some conditions, however, to limit the cost of the program to the government. You can’t get more than $500 in tax breaks ever from this program, with the possible exception of buying a windmill. You can’t get more than $200 for energy-efficient windows, either. [5]
Finding tax credits for energy efficiency isn’t as easy as it once was, but it is still definitely possible. Enlisting the help of a home energy auditor who will assist you in locating tax credits for energy efficiency may be all you need to start saving money and helping the planet.
Sources:
1. http://www.recovery.gov/about/pages/the_act.aspx
2. http://en.wikipedia.org/wiki/american_recovery_and_reinvestment_act_of_2009#tax_incentives
3. http://www.energystar.gov/index.cfm?fuseaction=rebate.rebate_locator
4. http://www.energystar.gov/index.cfm?c=tax_credits.tx_index
5. http://energystar.supportportal.com/ics/support/default.asp?deptid=23018&task=knowledge&questionid=32129
