The
state-run refund programs funded by the stimulus act for Energy Star-rated
appliances, including water heaters, may not be available until after
Thanksgiving. Read more to find out which water heaters are eligible for this
rebate program, as well as federal tax credits.
There’s
been some confusion as to the rebate program for Energy-Star-rated water
heaters I wrote about for
Plumbing & Mechanical’s
September issue. I hope this blog will help clarify a few things for you - and
your customers.
In
mid-July of this year, the U.S. Department of Energy announced that it had
nearly $300 million in funding from the American Recovery and Investment Act
(the stimulus plan) for
state-run rebate
programs dealing with consumer purchases of Energy-Star-qualified appliances,
including water heaters (storage tank and tankless).
Each
state’s energy office had to apply for funding. An initial application was due
on Aug. 15, with the full application due Oct. 15.
States
and territories received 10 percent of the funds after submitting the initial
application; the balance will be awarded after their program plans are
approved. DOE anticipates awarding most of the funding by Nov. 30.
This
means that, most likely, this rebate program will not be available in your
state until after Thanksgiving. Also, states have the
flexibility to select which residential Energy-Star-qualified appliances to
include in their programs, as well as the individual rebate amount for each
appliance -
so Energy Star water heaters may not be covered in
your state. However, the DOE recommends that states
concentrate on heating and cooling equipment, appliances and water heaters as
they offer the most energy-savings potential.
The
best place to keep track of what water heater rebates may be available in your
state is the online Database of State Incentives for Renewables and
Efficiency (DSIRE) -
www.dsireusa.org.
As
to which water heaters are Energy Star-rated, and thus eligible for the rebate,
check out
www.energystar.gov/waterheaters. At the right of the page are listed the five types of
water heaters covered: high-efficiency gas storage (tank-type); gas condensing;
whole-house gas tankless; solar; and heat pump. You can find eligible models
under the Resources tab for each water heater type. (Gas condensing models
eligible for Energy Star currently are not on the market; they should be
available by the end of this year.)
Each
type of water heater has its own energy-factor standard to become Energy Star-rated (the higher the energy factor (EF) is, the more efficient the water
heater):
- Gas storage - Energy factor must be at or
above 0.62. Beginning Sept. 1, 2010, the minimum EF increases to
0.67.
- Gas tankless - The EF must be at or above
0.82.
- Solar - Must have a solar fraction at or
above 0.5. (Solar fraction is similar to an energy factor.)
- Heat pump - These models must attain an EF
of at least 2.o or higher.
- Gas condensing - Once these models are on
the market, they must have an EF of 0.8 or above to be Energy
Star-labeled.
Tax Credits
Now, the tax credits for water heaters are a
different story. There are three types of water heaters covered by
federal tax
credits:
1.
Gas, oil and propane water heaters. These must have an EF of
0.82 or above or a thermal efficiency of at least 90 percent. The tax credit is 30 percent of the cost, up to $1,500, including
installation, in 2009 and 2010.
Most storage tank water heaters cannot qualify for the tax credit
because they cannot meet the energy factor requirement. However, there are some
storage tank water heaters that
can qualify for the tax credit because they have a
thermal efficiency of more than 90 percent; these models are larger than
what is typically considered a residential unit.
For a partial list of tankless water heaters that qualify for the
tax credit, go to the Air-Conditioning, Heating and Refrigeration Institute’s
Web site at
www.ahrinet.org.
2. Electric heat pump water heaters. Must have an EF of at least 2.0 to be covered. (All Energy
Star-qualified models are eligible.) The tax credit is 30 percent of the cost,
up to $1,500, including installation, in 2009 and 2010.
These are the
only electric water
heaters eligible for the tax credit.
3. Solar water heaters. These models are eligible
for a tax credit if at least half of the energy generated comes from the
sun. The system must be certified by the Solar Rating and Certification
Corporation (
www.solar-rating.org). All Energy
Star-qualified models are eligible.
The tax credit is for 30 percent of the cost, including
installation, with no upper limit, through 2016.
To claim the tax credit
for energy efficient products “placed
in service” in 2009, you will need to file the 2009 IRS Form
5695 and submit it with your 2009 taxes (by April 15, 2010). Currently,
only a
draft version of this form is available, without the
instructions section. (The IRS defines “placed in service” as when the property
is ready and available for use.)
On
the draft 2009 1040 form , the residential energy tax credit (from Form 5695)
is claimed on line 52.
Also,
consumers should save their receipts and the Manufacturer’s Certification
Statement for their records. A Manufacturer’s Certification Statement is a
signed statement from the manufacturer certifying that the product or component
qualifies for the tax credit. The IRS encourages manufacturers to provide these
certifications on their Web sites to facilitate identification of qualified products.
So, I hope this clears up
any questions you or your customers have on water heater rebates, Energy Star
qualifications and tax credits. If not, feel free to e-mail me at
faloonk@bnpmedia.com or call me at
630/694-4004. I’ll try to answer your questions, or at least steer you in the
right direction.
