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Federal Tax Credits For Energy Efficient Products Extended Through 2011

February 17, 2011 by Curtis Comments Off on Federal Tax Credits For Energy Efficient Products Extended Through 2011 divider image

Federal tax credits for the purchase of some energy efficient products have been extended into 2011. Though there have been some changes, the president has authorized the Tax Relief, Unemployment Reinsurance Authorization and Jobs Creation Act of 2010, which included tax credits for these energy efficient products.

A variety of different products are included in the tax credit, each with their own amount and restrictions. Biomass stoves that are fueled off of crops, trees, wood and similar natural waste, HVAC devices, insulation, roofing supplies, water heaters, windows and doors, geothermal heating, residential wind turbines, solar energy systems, and residential fuel cells have all been covered by the tax credits.

There are some credits that give 10 percent, while others give 30 percent of the cost of the device or system. Most of the tax credits have ceilings and limits as to how much can be received, though others do not. Most limits will cover up to $500 in tax credits.

Applying for these tax credits are fairly easy, though new tax forms will have to be filled out. Each of the tax credits can be applied for through EnergyStar.gov, where all of the steps toward application can be viewed or downloaded.

In many cases, the cost of the an energy efficient system will inevitably pay for it self. With a new water heater, such as the Rheem HP50RH Heat Pump Water Heater, annual costs can be cut in half. The company states that the average cost of operating a water heater, per annum, is $520, which can be cut down to $286 on an annual basis. With the tax credit, over $586 can be saved over the course of the first year alone.

At a cost of just under $2,000, a quarter of the price of a Rheem HP50RH will be covered in the first year alone. After approximately six years, the device would have already paid for it self. The investment becomes profitable after no more than ten years of service.





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