Energy efficiency and federal tax credits
July 7, 2009 by Taxcut Editor
Filed under IRS News Items
Matt Means is building a home in Midtown Tulsa. Once construction is complete, the home will be near zero energy efficient. This means it will actually put off more energy than it consumes.
Means is taking advantage of the federal tax credits. He has installed a geothermal heat pump system as well as 10 solar panels on the south side of the home.
Combined, he will earn $13,000 in tax credits.
“Energy bills on this home will be very small.” said Means.
Other items listed on the tax credit include windows, skylights, exterior doors, water heaters, insulation, and weatherstripping. These items would qualify for a 30% tax credit up to $1,500.
There are certain criteria and specifications for each item.
“It’s definitely helped our geothermal business.” said Joel Kinsch, owner of Elite Service in Tulsa.
Kinsch says his company has sold more geothermal systems this year than in all of 2008.
He believes it’s a direct impact from the tax credit.
Lowe’s is offering tax credit advice. At the store you’ll pamphlets explaining what qualifies for the tax credit and what doesn’t. You will also find the tax credit logo on certain items.
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Stimulus Fueling Energy Upgrades: Tax Credits, Rebates Encourage Homeowners to Make Homes More Efficient
June 15, 2009 by Taxcut Editor
Filed under Taxcut Blogs on Energy Savings
The federal stimulus bill passed by Congress this year is offering $1,500 to taxpayers to replace furnaces or windows or add insulation to make their homes more energy-efficient.
The tax credit, which is available for work done in 2009 and 2010, comes after Congress voted last year to remove tax credits for energy efficient upgrades.
The tax credit allows up to 30% for a variety of residential home retrofits, including buying a highly efficient furnace or water heater or energy-efficient windows and doors.
“That’s pretty lucrative, so we’re expecting some significant activity,” said Steven Nadel, executive director of the Washington-based American Council for an Energy-Efficient Economy. “On the other hand, it is a recession, so some people may not have the money. They have to come up with the other 70%.”
Global warming regulation bills pending in Congress would provide even greater incentives for homeowners to make their homes more energy efficient.
The bill calls for customer rebates that would increase on a scale, with the rebates growing as the energy savings produced by the retrofits increase. But whether those bills pass this year is unclear, and if they do, the higher rebates are not expected to be available until 2012 at the earliest, Nadel said.
The availability of new credits is one of several reasons that Focus on Energy, the statewide energy efficiency initiative, is seeing a big jump in homeowners moving to shore up leaky attics, walls and basements.
Work done through the Home Performance with Energy Star program has doubled through the first four months of the year, with 676 homes across the state getting work done, compared with 340 in the same period last year, said Sara Van de Grift of Focus.
Other factors are driving more activity: Focus has promoted retrofits through its Home Performance program more aggressively and is paying homeowners bigger rebates for doing the work, she said.
“Plus people are not moving,” Van de Grift said. “They’re staying in their homes, so if they do have some capital they’re choosing to invest in that home instead of saying, ‘I’m moving in a year.’ ”
“People are valuing things in a different way than they had,” Van de Grift said.
Motivated to upgrade
Jerry Becker of Hubertus said it wasn’t the tax credits that motivated his decision to add insulation throughout his home.
Becker was checking out other homes for sale in the area that were twice as large but had smaller utility bills.
“Our house was originally a summer cottage, and it was never really upgraded to be more energy efficient,” he said.
The federal stimulus bill passed by Congress this year is offering $1,500 to taxpayers to replace furnaces or windows or add insulation to make their homes more energy-efficient.
The tax credit, which is available for work done in 2009 and 2010, comes after Congress voted last year to remove tax credits for energy efficient upgrades.
The tax credit allows up to 30% for a variety of residential home retrofits, including buying a highly efficient furnace or water heater or energy-efficient windows and doors.
“That’s pretty lucrative, so we’re expecting some significant activity,” said Steven Nadel, executive director of the Washington-based American Council for an Energy-Efficient Economy. “On the other hand, it is a recession, so some people may not have the money. They have to come up with the other 70%.”
Global warming regulation bills pending in Congress would provide even greater incentives for homeowners to make their homes more energy efficient.
The bill calls for customer rebates that would increase on a scale, with the rebates growing as the energy savings produced by the retrofits increase. But whether those bills pass this year is unclear, and if they do, the higher rebates are not expected to be available until 2012 at the earliest, Nadel said.
The availability of new credits is one of several reasons that Focus on Energy, the statewide energy efficiency initiative, is seeing a big jump in homeowners moving to shore up leaky attics, walls and basements.
Work done through the Home Performance with Energy Star program has doubled through the first four months of the year, with 676 homes across the state getting work done, compared with 340 in the same period last year, said Sara Van de Grift of Focus.
Other factors are driving more activity: Focus has promoted retrofits through its Home Performance program more aggressively and is paying homeowners bigger rebates for doing the work, she said.
“Plus people are not moving,” Van de Grift said. “They’re staying in their homes, so if they do have some capital they’re choosing to invest in that home instead of saying, ‘I’m moving in a year.’ ”
“People are valuing things in a different way than they had,” Van de Grift said.
Motivated to upgrade
Jerry Becker of Hubertus said it wasn’t the tax credits that motivated his decision to add insulation throughout his home.
Becker was checking out other homes for sale in the area that were twice as large but had smaller utility bills.
“Our house was originally a summer cottage, and it was never really upgraded to be more energy efficient,” he said.
“We’re trying to push for a high efficiency, getting our planet green and then they took away the tax credit. When they took it away, it wasn’t a very smart move on their part.”
Steve Barnekow of Kerzner Window and Door in Oconomowoc said it would have been better if Congress had allowed separate tax credits for furnaces, windows and other kinds of work, but he said that rising energy costs still make it a good time to consider moves to bring down monthly utility costs.
“This helps offset something I’m paying for anyway, because every month you’re going to pay your utility bill, whether you like it or not. But if we can stop the increase or start to turn it back, that’s definitely going in the right direction,” he said.
Can’t use credits
Jeff Szymanski of Greendale said he bought energy-efficient windows but won’t be able to take advantage of the tax credit. His tax burden is so low he won’t qualify for the full $1,500 credit.
“Consumers should get what’s promised,” he said.
The IRS says the energy tax credits are non-refundable, which means that a taxpayer who is paying no taxes or who has a small tax bite won’t qualify for a refund.
Homeowners who take advantage of the renewable energy tax credit can roll those credits over to future years, while homeowners who use the retrofit tax credit cannot, the IRS say.
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Green energy sets up shop in Washington
May 20, 2009 by Taxcut Editor
Filed under Taxcut Blogs on Energy Savings
Before President Obama took office, most Massachusetts companies
developing technologies in the green energy field didn’t have a lobbyist on retainer. Wringing money from the Department of Energy and other agencies in Washington was simply too bureaucratic, and it took too long.
But in the months since the inauguration, companies working on new kinds of batteries, carbon sequestration techniques, and energy efficiency materials for buildings have hired lobbying firms and dedicated teams of employees to figure out how to land a portion of $100 billion in loan guarantees, grants, and other funding that’s expected to start flowing as a result of the Recovery Act.
“Emerging technology companies in the energy space are landing in Washington like locusts,” says Mitch Tyson, chief executive of Advanced Electron Beams, a Wilmington start-up that is just now hiring Holland & Knight LLP to handle its lobbying.
Hemant Taneja, a venture capitalist at Cambridge-based General Catalyst Partners, says that all of the energy-related companies in his portfolio are hiring government relations specialists and lobbyists: “This is a $10,000-a-month expense that could yield significant capital for our businesses, which are really capital-intensive.”
Stimulus funding is the hot topic in clean-tech circles right now. The New England Clean Energy Council organized a field trip to D.C. last month to speak with administration officials like Carol Browner, the president’s special assistant for energy and climate change. And last week, the Department of Energy hired David Danielson from General Catalyst Partners to help dole out $400 million as part of a newly-funded program called the Advanced Research Projects Agency for Energy, or ARPA-E.
The better-known ARPA, of course, is the group within the Department of Defense that helped launched the Internet (whose predecessor was known as the ARPANET). And the hope is that the federal government’s stimulus funding will help spark a similar kind of explosive growth for the green energy sector – even if it takes a decade or two to really pay off.
“The Department of Energy has traditionally been about supporting early-stage technologies in research labs and doing weapons cleanup,” says Steve McBee, chief executive of McBee Strategic Consulting, a Washington lobbying firm working with several local companies. “Now, you’re talking about being an incubation instrument for clean energy solutions and helping them get to scale.”
McBee estimates that about $50 billion of the $800 billion stimulus package will go to renewable energy and energy efficiency – and that’s on top of $50 billion in Department of Energy loan guarantees that preceded the stimulus package, but have only just begun to flow.
That funding could help solidify Massachusetts’ position as a center of gravity for changing the way the world produces and uses energy. And local companies have all kinds of plans for how they’ll use the money.
GreatPoint Energy is hoping for $100 million or so in government loan guarantees, which can help lenders get comfortable with risky projects, to fund a facility that could cost between $300 million and $500 million to build. The facility would convert coal into synthetic natural gas, and sequester the resulting carbon dioxide (rather than releasing it into the environment).
“Getting that kind of project financing in ordinary markets would be challenging,” says Daniel Goldman, chief financial officer of the Cambridge company, “and these aren’t ordinary markets.”
Advanced Electron Beams makes a system that today is used to sterilize food packaging, but the company believes its electron beams would also be useful for controlling the pollution emitted by power plants. Tyson says the company will apply for a grant of several million dollars to develop the technology, as part of the new ARPA-E program.
Boston-based Ze-gen Inc. is hoping for a loan guarantee that could help it expand a New Bedford facility that’s still in the planning stages. The facility, which would create about 60 full-time jobs, would transform trash such as scrap metal into synthetic natural gas. Chief executive Bill Davis says that the stimulus funding will provide a boost to his industry – but so might the cap-and-trade system currently being discussed in Congress, which would place a price on carbon emissions.
“That forces companies to look at the true costs of producing energy, and it’d be more of a long-term help to the markets than stimulus,” Davis says.
Boston-Power Inc., a battery company based in Westborough, started chasing stimulus funding in February, with a team of about a dozen employees and outside consultants working on the project. Chief executive Christina Lampe-Onnerud says the company will find out in July whether it has received a Department of Energy grant that would enable it to build a new factory in Auburn.
Lampe-Onnerud says the company today makes all of its lithium-ion laptop batteries in Taiwan, where it employs about 300 people. The Massachusetts facility could employ more than 600 people, she says – and the company is also planning to expand from just making lithium-ion batteries into producing batteries for hybrid and all-electric vehicles as well.
For venture capitalists who have poured millions into clean-tech companies, the government funding is a godsend: At a time when their companies can’t go public, and few of them have matured to the point where they’re appealing acquisitions for an ExxonMobil or a BP, stimulus money will allow companies to survive longer, take more shots on goal, and ideally develop something that both benefits society and their investors.
Will some of the companies that get government money fail? Absolutely. (Just last week, Cambridge-based GreenFuel Technologies, which used specially bred algae to turn carbon dioxide into biodiesel, announced that it was shutting down after gobbling up $70 million in private funding.)
“I think you have to accept the fact that you’ll see some of these companies flame-out, and capital will be lost,” says Hemant Taneja, who acknowledges that venture capitalists have “gone overboard” in funding too many clean-tech start-ups over the past few years. “But you’ll also see some brilliant, big companies that will get built, and will be good for climate change and economic development. I just don’t see how else you can do it.”
Reposted from an article at http://www.boston.com/business/technology/articles/
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More Federal Tax Credits for Energy Efficiency are Available for Consumers and Home Builders Then Ever Before.
May 14, 2009 by Taxcut Editor
Filed under Taxcut Blogs on Energy Savings
A “perfect storm” is brewing for all US and Northern Virginia homeowners this spring, interested in saving money on energy costs, saving money on taxes, and promoting a healthy, clean, environmentally-friendly lifestyle for themselves and their families. On February 17, 2009, President Obama signed a stimulus bill (The American Recovery and Reinvestment Act of 2009) that made some significant changes to the energy efficiency tax credits. More Federal Tax Credits for Energy Efficiency are available for consumers and home builders, at a much higher 
percentage of cost (up to 30%), with very few upper limits or exceptions. Tax deductions are available as well for businesses.The highlights are:
- The tax credits that were previously effective for 2009, have been extended to 2010 as well.
- The tax credit has been raised from 10% to 30%, with no upper limit through 2016 (for existing homes only).
- The tax credits that were for a specific dollar amount have been converted to 30% of the cost.
- The maximum credit has been raised from $500 to $1500 for the two years (2009–2010). However, some improvements such as geothermal heat pumps, solar water heaters, and solar panels are not subject to the $1,500 maximum.
- The $200 cap on windows has been removed.
These tax credits convert into significant savings for consumers interested in Northern Virginia home renovations and remodeling, or consumers simply interested in lowering energy costs through use of new energy-efficient home features like vinyl windows and HVAC units, solar panels and hot water heaters, or simply additional, updated insulation, roofing or caulking projects. This is the absolute best time of year, as well, to begin planning home renovation, repair and remodeling projects that require warmer weather to implement – and require longer lead times from service providers as the spring orders increase.
(from Northern Virginia Wash DC Businesses)
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Solaris Energy
May 11, 2009 by Taxcut Editor
Filed under IRS News Items
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