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How Did Homeowners Use the Energy Tax Credits?
Robert Dietz / NAHB / September 30, 2013
In 2005, Congress established a number of energy-efficiency tax incentives related to housing. These policies include the tax code section 45L credit for the construction of energy-efficient homes, the 25C credit for retrofitting existing homes, and the 25D credit for the installation of power production property in new and existing homes.
Using earlier IRS data for tax year 2009, we previously examined who benefitted from these credits, as well as how homeowners used the credits. Newer 2010 data also allow exploring these energy related investments.
The 25C credit is only available for existing homes. In 2010, the rules were more favorable than today, with a 30% credit and $1,500 limit. Those rules have since been pared back during successive extension efforts. The current form of the credit expires at the end of 2013.
The IRS data indicate that in terms of dollars, energy-efficient windows were the most popular investment, totaling more than $7.8 billion of spending by more than 2.2 million homeowners. Energy efficient natural gas, propane, and oil powered water heaters and furnaces were second, with $5.3 billion in qualified expenditures by almost 1.4 million taxpayers.