The Energy Policy Act of 2005
What the Energy Bill Means to You
The Energy Policy Act of 2005 (EPACT), signed by President Bush on August 8, 2005, offers consumers federal tax credits beginning in January 2006 for purchasing energy-efficient appliances and products. Most of these tax credits remain in effect through 2007.
Installing an energy efficient central air conditioner or heat pump, a high-efficiency central furnace or additional attic insulation can provide many benefits to homeowners, including reduced energy usage and utility bills and increased indoor comfort. Austin homeowners can qualify for as much as $2,300 in local utility rebates from Austin Energy and Texas Gas Service, too.
About the Tax Credits
A tax credit is generally more valuable than an equivalent tax deduction because a tax credit reduces tax dollar-for-dollar, while a deduction only removes a percentage of the tax that is owed. The energy tax credit should reduce the amount of federal income tax the homeowners owes on a dollar-for-dollar basis.
Home Energy Efficiency Improvement Tax Credits
Consumers who purchase and install specific products, such as energy-efficient attic insulation and heating and cooling equipment in the home can receive a tax credit of up to $500 beginning in January 2006. Improvements must be installed in or on the taxpayer’s principal residence in the United States. Home improvement tax credits apply for improvements made between January 1, 2006 and December 31, 2007.
Below is a table of anticipated tax savings and energy savings for energy-efficient home improvements:
Product Category |
Product Type |
Tax Credit Specification |
Tax Credit |
Insulation |
Insulation |
Meet 2000 IECC & Amendments |
10% of cost not to exceed $500 total |
HVAC |
Central AC System |
EER 12.5/SEER 15 split Systems EER 12/SEER 14 package systems |
$300 |
Central Air-source heat pumps |
HSPF 9 EER 13 SEER 15 |
$300 |
Gas, oil, propane furnace or hot water boiler |
AFUE 95 |
$150 |
Advanced main air circulating fan |
No more than 2% of furnace total energy use |
$50 |
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If your central AC system, heat pump or furnace is ten years old or more, or if you need additional attic insulation -- R-38 is increasingly being recommended for the Austin area – you owe it to yourself to learn more about how you can save additional money via the Home Energy Efficiency Improvement Tax Credits. For additional information, please contact McCullough Heating & Air Conditioning at 280-0011.
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