President Obama signed the “stimulus” package into law on February 17. I prefer the term “porkulus”.
Embedded in that garbage legislation are a mind boggling array of things that really have not much of anything to do with reviving our economy. Pretty much everybody knows that.
There is a small piece of the “porkulus” that may help you if you are needing to update the mechanical systems of your domicile.
For qualifying systems (I will get to what qualifies in a minute) there is a tax credit available for the time period of Jan. 1, 2009 through Dec. 31, 2010. Note this is not a “write-off”, it is a tax credit. In other words, it comes off of your bottom line if you owe, or comes back to you if you are owed money from the Feds.
So what is the fine print?
The tax credit is for homeowners only, for their primary residence only (no cottages, etc). No businesses. The credit is 30% of the cost of the newly installed equipment (including labor), with a cap of $1500. If you participated in previous federal tax credit programs in the past you may participate in this one.
The equipment must be rated at 95% AFUE (Annual Fuel Utilization Efficiency) or higher for a natural gas or propane furnace. A central air conditioner must be rated at 16 SEER (Seasonal Energy Efficiency Rating) or higher, and an electric source heat pump must be rated at 15 SEER. There are credits available for boilers and continuous flow water heaters as well. Not to mention windows and other energy efficient upgrades.
Just a few thoughts from a guy in the industry on this. If you install a 95% furnace coupled with a 16 SEER air conditioner, you are easily going to exceed the $5000 maximum bill from your contractor (30% of $5000 = $1500). This is a very good deal if you need to replace your HVAC equipment and can afford this type of equipment. 95% furnaces are fairly common, but a 16 SEER air conditioner is not a cheap date. On top of this, in my area of the country where we use air conditioning just a couple months out of the year, a 16 SEER air conditioner is certainly overkill. IMHO the current 13 SEER minimum is overkill for the northern climes, but that bus left the station long ago.
I do think this will push some people who just perhaps need a new furnace to move into the 95% realm, and will also push people to get rid of their old tank water heaters and move into instant ones. The energy savings on those is up for debate in my mind, but the rating is the rating and that is that. Not my battle to wage.
So if you have the money and were thinking about upgrading your mechanical systems in your place, don’t forget to take the $1500 off of your taxes!