Legislation Drafted That Would Extend Residential Energy Efficiency Tax Credits, Create Two Levels of Tax Credits for Windows

October 6th, 2010 by Editor

Sen. Olympia Snowe (R-Maine) and Sen. Jeff Bingaman (D – N.M.) have drafted legislation that would extend the current residential energy tax credit for two years and would allow taxpayers to claim up to $3,000 in credits over this period. The legislation also would create two levels of credits for energy-efficient windows. The first credit would provide a 10 percent tax credit, capped at $200, for windows that meet the current Energy Star® standards. The second credit would provide a 30 percent credit, capped at $1,000, for highly advanced windows including windows that meet the specifications of the Department of Energy’s R-5 program.

“Residential energy efficiency has been identified as the most effective strategy to enhance our energy security and save money on energy bills,” says Snowe. “The residential energy efficiency tax credits that currently provide a 30 percent tax incentive for the purchase of insulation, windows, and efficient furnaces and water heaters have been key catalysts in improving the energy efficiency of homes throughout the country. Furthermore, these policies have driven companies to produce the most advanced products current technology allows and must be extended.”

She adds, “My draft legislation would build on the success of these tax credits by focusing tax credits on the most efficient products available, and expanding the credit for efficient heating systems. I appreciate the input from Senator Bingaman and look forward to further refining this legislation to ensure that this key energy efficiency driver is crafted to truly transform our existing houses in our country.”

A statement from the American Architectural Manufacturers Association (AAMA) about the legislation notes that while Rich Walker, AAMA president and CEO, has spoken in favor of this type of legislation, he “believes that specific provisions of the current draft of the legislation don’t serve as an effective incentive for homeowners looking to make energy-efficient home renovations.”

“The untimely and poorly administered EPA Lead Renovation, Repair and Painting (LRRP) regulations have increased the cost of window installations to as much as $200 in some locations,” says Walker. “Coupling those additional installation labor costs with an average $150 window purchase, the consumer would pay $350 and receive a paltry tax break of only $15. This is clearly not enough of an incentive to drive consumer sentiment toward energy-efficiency improvements and subsequently will do little to spur job growth.”

Window and Door Manufacturers Association president and CEO Michael O’Brien says that though the draft does appear to be a positive, it’s still early in the process.

“WDMA fully supports extending the tax credits and we believe they can have a positive impact on the industry, save consumers money and improve energy efficiency,” he says. “However, what was released was merely an early discussion draft and a starting point for discussions on extending the tax credit into 2011-2012. People should not assume that any extension will look like what is in the discussion draft. WDMA’s leadership is fully engaged in the issue and we will be working with Sens. Bingaman, Snowe and others to seek the best possible legislation.”

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