Residents making some energy-efficiency improvements to their homes this year can still get some tax credits, but Uncle Sam isn’t being as generous as he used to be.
Tax credits are being offered for such improvements as new exterior windows, insulation, exterior doors, roofs, central air conditioners, furnaces and boilers.
The tax credits offered for improvements have returned to levels from 2006 and 2007, according to the Energy Star organization, or one-third the incentives that were offered just last year.
So instead of some credits being worth as much as $1,500 like they were in 2010, for qualified improvements in 2011, the maximum credit will be $500 or 10 percent of the cost of the improvement with that $500 cap. The $500 credit is also a lifetime limit going back to 2006 through 2011 combined.
So that means that if you have claimed any type of energy-efficiency tax credits going back to 2006, it counts against the $500 limit (but does not affect the $1,500 limit that was available in 2009 and 2010). For instance, if you claimed $300 in 2007, you can only claim $200 in 2011. If you claimed $800 in 2009, you cannot claim any more credit, according to the Alliance to Save Energy.
The reduced credits are disappointing, said Ronnie Kweller with the Alliance to Save Energy.
‘‘We would like to see people get as much help being energy efficient as possible,’’ she said. ‘‘But still, every little bit helps. Also, as products are on the market longer, prices tend to drop.’’
Kweller said while some of the technical requirements for what qualified for tax credits have eased for 2011, limits on particular improvements have been set. For instance, there’s a $200 cap on credit for windows, which is often one of the more expensive items, she said.
Other limits include $150 for furnace and boilers and $300 for central air conditioners. (See full chart with this story.)
The credits will be available for improvements ‘‘placed in service’’ between Jan. 1 and Dec. 31 of this year. The IRS defines ‘‘placed in service’’ as when the products or materials are ready and available for use, which usually refers to installed, not purchased.
A separate tax credit still exists for renewable energy-efficient improvements, such as solar water heating, solar electric, small wind and geothermal.
Lowell Ungar, director of policy for the Alliance to Save Energy, said it’s unknown whether there will be any tax credits offered for purchases in 2012 for energy-efficient products, but it’s possible they may not happen.
The fiscal pressure of the government to reduce spending instead of increase spending could make it difficult for more tax credits to be approved, he said.
‘‘I think overall, the tax credits are more likely to go down than up. There’s a significant possibility next year there won’t be any tax credits for consumers,’’ Ungar said.
The tax credits offered over the years for energy-efficiency improvements seem to have spurred purchases on existing homes.
According to the U.S. Energy Information Administration, consumers claiming credits for energy-efficient purchases have increased $395 million in 2007 to $3.2 billion in 2010.
Still, Ungar said typically energy savings that consumers will get from investing in the energy-efficient new products are greater than any tax incentive received.
‘‘It’s better, in general, to go ahead and make improvements. Then you can start saving energy,’’ he said. Ungar also suggests checking with utilities to see if there are any rebates or incentives for consumers to purchase energy-efficient products.
Dominion does not currently offer any rebates for energy-efficient improvements to heating products, said spokesman Neil Durbin. But Ohio Edison offers several incentives that are outlined at www.energysaveohio.com. They include up to $150 in a rebate with the installation of an energy-efficient air conditioning unit and up to $50 for appliances such as a washer, refrigerator-freezer, room air conditioner and dehumidifiers.
Betty Lin-Fisher can be reached at 330-996-3724 or blinfisher@thebeaconjournal.com. Follow her on Twitter at www.twitter.com/blinfisher and see all her stories at www.ohio.com/betty
