Colorado Economic Recovery and Accountability

Web Update - Energy Improvement Tax Credits

The Governor's Economic Recovery Team is urging Colorado homeowners to take advantage of tax credits available through the American Reinvestment and Recovery Act. The landmark law, signed by President Obama in Denver in February 2009, includes federal tax incentives for homeowners who make energy improvements on their homes this year or in 2010. In addition to these incentives, the state also offers savings.


The types of work eligible for the tax credits include installing energy efficient windows, doors, roofs, insulation, heating and air conditioning systems and water heaters. After June 1, 2009, the eligibility requirements for windows become stricter. Homeowners who are interested in installing new windows should consider doing so before the end of the month. Homeowners can deduct up to $1,500 from their income taxes for eligible projects.


Tax credits offered by the Recovery Act are even larger for homeowners who install biomass stoves, geothermal heat pumps, solar energy systems, small wind energy systems and fuel cell and microturbine systems. Homeowners can deduct up to 30 percent of the cost of the project.


The program is administered by ENERGY STAR, a joint venture between the Environmental Protection Agency and the U.S. Department of Energy. More information is available at www.energystar.gov/taxcredits. Homeowners need to purchase eligible products and to keep receipts for products and installation fees. Then they must obtain a tax form from the IRS and submit that form with the receipts when they file income taxes.

Homeowners and small businesses in Colorado can also benefit from rebate programs offered by the Governor's Energy Office (GEO) and its many partners across the state, including the Colorado Solar Energy Industries Association (CoSEIA). The rebates help cover the cost of adding insulation in homes, the addition of solar electric and hot water systems and the installation of small wind energy projects.

  • Insulate Colorado provides homeowners a rebate of 20 percent of the project cost, up to $300 per home, to insulate and air-seal their homes to help reduce energy costs. The insulation must be installed by an eligible Colorado contractor and homeowners must reside in a participating jurisdiction to receive the rebate.
  • The GEO's solar rebate program offers up to $9,000 per solar electric system ($4,500 from the GEO and $4,500 from a local program partner) to qualified homeowners. Rebates up to $15,000 are available to small businesses. The program is not available in the Xcel Energy and Black Hills Energy service areas, as those utilities offer their own rebate programs for solar electric systems.
  • Solar-heated domestic hot water systems are also eligible for rebates of up to $3,000 per system ($1,500 from the GEO and $1,500 from program partners). In the average Colorado home, up to 15 percent of annual energy consumed is used for heating hot water, so a solar water heater can lead to significant savings. Rebates of up to $9,000 per system are available to small businesses.
  • Homeowners can receive rebates up to $6,000 for small wind turbine installations through a program GEO offers through five partners, including four utilities. Rebates cannot exceed 50 percent of the project cost and the wind systems must be tied into the local utility. Stand alone systems are not eligible.


More detailed information is available about each rebate program through the state energy office website at www.colorado.gov/energy.


Contact:

Todd Hartman, 303-866-2262, todd.hartman@state.co.us;
Myung Oak Kim, 303-947-5708, myung.kim@state.co.us;