Incentives for Home Weatherization

Increasing your home's energy efficiency does not have to break the bank. There are a variety of federal- and state-level options available to the owners of older and historic homes and buildings who are looking for financial incentives to undertake larger weatherization and/or rehabilitation projects.

Weatherization Assistance Program

Bullet The Department of Energy's Weatherization Assistance Program was created in 1976. To date, more than 5.8 million homes have benefited from the program. An additional one million homes are expected to receive assistance thanks to over $5 billion in stimulus funding.

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As part of the U.S. Department of Energy's Weatherization Assistance Program, each state is now administering over $5 billion in stimulus funds for this program, which was created in 1976 in response to the nation's first energy emergency. More than 5.8 million homes have benefited from the program since it first began. An additional one million homes are expected to receive weatherization assistance through the recent economic stimulus funding.

Eligibility: About 38 million households are currently eligible for weatherization services. Any household at or below 200% of poverty, per the modified statue, is considered low-income. About 15 million of all eligible households are good candidates for weatherization. Priority service is given to the elderly, people with disabilities, and families with children.

What You Can Do: Check out the U.S. Department of Energy's fact sheet and website for more information and instructions on how to apply for funding in your state and community.

Homeowner's Tax Credit for Energy Efficiency

The economic stimulus package reinstituted and expanded tax credits for energy efficient home improvements – a program that previously expired in 2007. This is an increase in the credit over the one that was available in 2006 and 2007. The current program is available for 2009 and 2010.

Eligibility: The program provides a tax credit for 30% of the cost of eligible energy-efficient activities, up to a cap of $1,500. Only improvements to your primary residence qualify for the program. Geothermal heat pumps, solar water heaters, solar panels, and small wind energy systems are not subject to this cap, and are in effect through 2016. Installing storm windows and doors are eligible expenses as long as there is a qualifying manufacturer certification statement.

Storm Windows and Doors: There have been many concerns recently about the eligibility of storm windows/doors for the $1,500 stimulus tax credit. The following Q&A is intended to clear up some of these questions.

Question: Do storm windows/doors qualify for the tax credit? Yes. Despite some confusion and misleading information, storm windows/doors do qualify for the tax credit. This chart from the U.S. Department of Energy, the Environmental Protection Agency, and Energy Star clearly lists them as eligible products.

Question: Are all storm windows and/or doors eligible? No, and this is where the main problem lies regarding eligibility. The 2009-2010 provisions established a higher standard than in 2007, and all eligible storm windows/doors (purchased between June 1, 2009 to December 31, 2010) must have a U-value of 0.30 or lower and a solar heat gain coefficient of 0.30 or lower. While it is common for new windows to offer specific qualifications regarding performance, it is a difficult to assess for storm windows/doors. Measuring the U-value and solar heat gain of storm windows/doors depends on the performance of the existing window in combination with a storm window, which will always be a case-by-case basis. This can only be tested after storm windows/doors are installed and will vary greatly from building to building. While some storm window/door manufacturers are marketing their products in conjunction with the tax credit, others are not because the performance standard is difficult to substantiate for all cases. Some are listing classes of exterior windows (single pane, clear glass, double pane, low-E coating, etc.) that a product may be combined with to be eligible in specific climate zones.

Question: What do I need to claim the tax credit? You need a Manufacturer's Certification Statement – a signed statement from a manufacturer certifying that the product or component qualifies for the tax credit. Taxpayers must keep a copy of the certification statement for their records, but do not have to submit a copy with their tax return. Some manufacturers are providing these certificates on their websites, while others are taking a more conservation approach and not issuing these certificates since it can be difficult to substantiate on a case-by-case basis. Though there are others, two storm window/door manufacturers that do provide certificates are Gorell and Kaufmann. As always, please check with your tax advisor for advice.

What You Can Do: Visit the U.S. Department of Energy for an outline of eligible expenses. Also, for more information on the stimulus funding as well as and constantly-expanding case studies, check out our Perfect Storm website.

Energy Efficiency and Conservation Block Grants

With 3.2 billion in economic stimulus funding, this program is assisting local governments in implementing energy efficiency and conservation strategies.

Eligibility: Over 2,300 state, local, and tribal governments are eligible for direct formula grants from the Department of Energy. Competitive grants are also available under the program. Governments ineligible for direct formula grants from the Department of Energy are still eligible for these competitive funds, as well as for funds from their state's energy office.

What You Can Do: Check out the U.S. Department of Energy's fact sheet for more information. To find contact information for your state's energy office and to learn more about programs that might offer assistance in your community, visit the National Association of State Energy Officials.

State Tax Credits for Historic Preservation

For larger projects, 30 states currently offer credits against state tax liability for the rehabilitation of a qualifying historic building. More importantly, 25 states offer tax credits for the rehabilitation of owner-occupied residences.

Eligibility: Each state administers its tax credit program differently, so it is important to find out the process and to make contact early before starting your project.

What You Can Do: Check out our state-by-state guide to learn more and to find contact information for the program in your state.

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Want to dig deeper? Visit our Whole House Resource Bank for links to some of the best weatherization information and materials available online. From insightful blogs and articles by the experts, to checklists and how-to's, you’ll find it all here.