Legislative Update on Federal Energy Efficiency Tax Incentives

Congress Extends Energy Efficiency Tax Incentives

On Oct. 3, 2008, the President signed into law legislation to extend many of the Energy Efficiency Tax Incentives first enacted in 2005 but that expired at the end of 2007 or that were scheduled to expire at the end of 2008.  The bill also includes extensions of a variety of renewable energy tax incentives.  The energy efficiency provisions include:

• An extension of the commercial buildings tax deduction to the end of 2013.
• An extension of the tax credit for efficient furnaces, boilers, air conditioners, water heaters and insulation and window upgrades to existing homes (covering improvements installed in 2009, but not 2008).
• A one-year extension of the new energy-efficient home tax credit, to the end of 2009.
• Three-years of manufacturer tax credits for sales of high-efficiency refrigerators, clothes washers, dishwashers, and dehumidifiers (2008-2010).
• A new tax credit for plug-in hybrid vehicles purchased starting in 2008 and extending until shortly after the number of qualifying vehicles reaches 250,000.
• A new 10% investment tax credit for combined heat and power systems (through 2016)
• An extension of fuel cell and microturbine credits to the end of 2016.
• Accelerated depreciation for smart meters and smart grid systems.
• Extension of an existing bonding program for green buildings and sustainable design, and establishment of a new energy conservation bond program that would help local and state governments to fund energy conservation efforts.

The bill pays for these provisions by restricting several oil and gas industry tax breaks, and tightening some provisions on the sale of stocks. For specifics on these measures, visit the Tax Incentives Assistance Project.

Additional Activities

• Other Potential Federal Legislation


• Tax Incentives Awareness Project
  The Tax Incentives Assistance Project (TIAP), sponsored by a coalition of public interest nonprofit groups, government agencies, and other organizations in the energy efficiency field, is designed to give consumers and businesses information they need to make use of the federal income tax incentives for energy efficient products and technologies passed by Congress as part of the Energy Policy Act of 2005.


• Federal Energy Policy Act of 2005
  

ACEEE Technical Reports

• Tax Incentives
• Energy Policy Legislation
  • Energy Policy Act of 2005

Additional Resources and Links

• Summary of Energy Efficiency Tax Incentives in the Energy Policy Act of 2005 (31 KB)
• EPAct 2005 Light-Duty Hybrid and Diesel Vehicle Tax Credit Summary (ACEEE)
• Database of State Incentives for Renewables and Efficiency
• Tax Credits for Energy-Efficient Technologies: Spurring Adoption of Cost-Effective Innovation (ACEEE Fact Sheet)
• Tax Incentives for Advanced Energy-Efficient Technologies: Costs, Benefits, and Legislative Recommendations (ACEEE Fact Sheet)
• DOE's Tax Incentive Information
  

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For more information contact:
Steven Nadel, Executive Director
Suzanne Watson, Policy Director

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