The Stimulus Bill, it's rather confusing. I have previously posted some of the Positive Sides to the Bill and this is part 3 of my Energy Efficiency Tax Credits in the '09 Stimulus Bill.
If you have been following my Webinar Series through 'Turning Houston Green' on Greening the Existing Home, you know that this Saturday, Michael Strong and I will be going over Water and Lighting Fixtures. Part of this will be in regards to Energy Efficient Water Heating Solutions which includes Tankless and Solar Water Heating.
In doin
g our research, we noted that the Stimulus Bill changed the Tax Credits for this also. Because the changes go through 2010, we think it is important for people to understand what it is you can actually get with your Tax Credits. Be an educated consumer so that you can make the most of you upgrades.
So, here's the 411:
Tankless Water Heaters - Whether you get one that is Gas or Electric, it still needs Electricity. Why? There is an actual start for these babies to kick in and start heating your water. So, with a Gas Tankless Water Heater, it still uses ELECTRICITY to start up. THEN uses the Gas to heat the water. This means that during a power outage, you will STILL NOT HAVE HOT WATER. Because of this, Tankless Hot Water Heaters fall under the Energy Efficiency portion of the Stimulus Bill.
What does that mean to you? You can get a Tax Credit for 30% of the purchase UP TO $1500 on ALL of your Energy Efficient Improvements - (such as windows which will be another post) Max. That's It. $1500.
Now, Solar Water Heating:
This is considered to be Renewable Energy. No electricity or gas is really required. That means that you are solely using electricity derived from a Renewable Source, in this case THE SUN. During a power outage you WILL HAVE Hot Water. (not that the power outage has anything to do with, just making a point)
For these reasons, it falls under a completely different category. Actually, it falls under the same category as GeoThermal and traditional Solar Panels.
What does this mean to you? You can get a Tax Credit for 30% WITH NO CAP!!
Personally, I would use the Energy Efficient Tax Credit for Windows, Insulation, etc. and maximize by upgrading to Solar Hot Water. You can only get a Maximum One Time Tax Credit of $1500 for Energy Efficiency, yet there is no cap on Solar/Renewable Energy right now.
With a typical cost of $5000 for Solar Water Heaters - That would give you an ADDITIONAL $1500 Tax Credit if you are making other Energy Efficient Improvements to your home.
Just a little food for thought. To sign up for our Webinar Series on Saturday for more details on the Benefits of Energy Efficient Water Fixtures in your home, you can register here.
***Source: Pages 125-127 of the Division B Tax, Unemployment, Health, State Fiscal Relief and Other Provisions from the Department of Energy Website***
***Photos: These are from Houston's First LEED Certified Home Built by Greenhaus Builders***
These credits are great -- it is too bad there is a gap for several months in 2008 up to the time one can use these credits. Do you think there is any chance these can be made retroactive to cover the period the Bush administrataion let the old credits completely lapse for part of 2008?
Steph, that makes total sense. Thanks for looking out for the consumer and making it simple to understand =)
I have the on demand electric water heater and I've experience having no hot water so I love your idea about the solar water. I'm a little confused though... I thought the absolute maximum was $1,500 no matter how much you spent so that any investment over $4,500 in a single year wouldn't yield a bigger credit. Am I wrong?
Hi Joan, I don't think they will do that. But, we never know. :)
Thanks Maggie!! :)
Hi Maya,
They have separated the renewable energy and energy efficiency. It's confusing as heck which is why I am actually taking time to read through the stimulus bill and the provisions that are involved in it.
For energy efficiency you can get a 30% tax credit UP TO $1500. For Renewable Energy there is a 30% tax credit with NO CAP. Meaning, fuel cells-solar panels-wind-solar hot water-geothermal-etc.
I have updated the post with a link to the 285 page pdf that explains it all. Check out pages 125-127. It won't take but about 3-5 minutes to read...pretty easy to understand on that document.
Stephanie,
As you know from some of my previous posts and comments, I heat and cool my home 'GEOTHERMALLY' at a tremendous cost reduction...!
I have an older style 'pump and dump system' which requires two wells! I have been promoting the newer style 'closed loop' system which I felt was lower in cost to install...
NOW I find out that the 'closed loop' is not nearly as efficient as the older style...I'm using your blog to help disseminate this info...! If you're considering GEOTHERMAL, and you should be...check with a professional HVAC person before deciding...!!!
Thanks, Fran
P.S. The most efficient fossil fuel types of heating are in the low 90s percentile...approx. 93%...GEOTHERMAL is around 400% to 500% efficient in comparison...!!!
To paraphase the Beatles : I'll follow the Sun! Great post, keep up the good work I learn more and more from you all the time.
Hi Fran, Yes- I remember. :) I am glad that the 30% with NO cap applies to geothermal now. Maybe we can get some folks in Houston to do it now!!!
Thanks Dena, :) I'm a fan of solar myself. Thinking about doing solar hot water...but have other things I need to do to the home first. LOL
Thanks for the informative post! These tankless water heaters are just starting to become known in my neck of the woods.