Energy Efficiency Tax Credits from the Stimulus Package
President Obama’s stimulus package changed the rules on tax credits for energy efficiency. These changes should make investing in energy efficiency a no-brainer for small businesses and homeowners.
Obama’s focus on reducing carbon emissions, investment in clean energy and creating green jobs to boost economic growth is clear. As a result of the package:
- energy efficiency tax credits have been raised from 10% of cost to 30%;
- the maximum tax credit has been raised from $500 to $1500 on individual efficiency upgrades;
- more expensive upgrades, such as solar panels, solar water heaters, and geothermal pumps are not limited to their previous $1,500 maximum, and;
- the $200 tax credit cap on efficient windows has been removed (however, the standards are also more stringent).
All of this means that there has never been a better time, financially, to upgrade, insulate, and/or weatherize your buildings. These investments should pay for themselves relatively quickly, given the incentives and the energy savings, and provide long term savings in addition to good PR for your company.
For example, Jiminy Peak, a small ski resort in Massachusetts, put in a wind turbine at their resort. With an up-front cost of roughly $4M and energy savings of $450,000 per year, the turbine will pay for itself in less than ten years and provide reliable electricity for many years after. Jiminy Peak has protected itself from fluctuations in energy costs and power outages, and meanwhile given itself a nice PR victory.
The Small Business Association also has a guaranteed loan program for construction and renovation including Energy Star appliances and upgrades. The 7a Loan Guaranty Program has a high degree of flexibility in what you are able to use the money for, including energy efficiency, retrofitting, and new Energy Star upgrades.
Scott Cooney is the author of Build a Green Small Business: Profitable Ways to Become an Ecopreneur (McGraw-Hill), and hopes that the green economy will someday just be referred to as…the economy.
Photo credit: BrentDanley on Flickr Creative Commons