Qualifying for Tax Credits for the Energy STAR Program

The Energy STAR program pertains to the energy usage and environmental responsibility of many kinds of products, some of which can consequently be used to apply for IRS tax credits. It should be noted by prospective applicants for an IRA tax credit under this program that while Energy STAR standards as a whole govern over 40,000 products and their classification in the commercial marketplace, the number of products which can be eligible for the financial savings of IRS tax credits is far more limited.

The Energy STAR tax credits apply generally to the heating and cooling systems used in residences, and may provided to applicants, upon the successful admission of their request, if they fall within the limits that the program considers to constitute environmental responsibility.

The Energy STAR IRS tax credit is thus primarily directed toward the affordability of home ownership, but because its primary focus is on environmental responsibility, rather than the alleviation of poverty or financial problems, it does not establish an income level above which homeowners will be excluded from eligibility for IRS tax credits. In this sense, the program differs from other tax credit programs maintained by the IRS in that it is not "means based."

The Energy STAR program for IRS tax credits was designed by its creators in the EPA to provide for the popularity of devices which are known to have an effect on the environment, such as air conditioners. Rather than banning such devices altogether, the provision is intended to control and limit the impact that these devices can have on the environment and allow homeowners to more easily act with responsibility toward the issue of greenhouse gases.

The website for the Energy STAR programs specifies the kinds of devices which may be used by a homeowner to apply for an IRS tax credit. The IRS tax credits are not provided to a builder or prospective owner before the residence is built, as part of a means for financing construction, but must be applied for after the home has been built and has been purchased to serve as a residence.

The kinds of devices and functions which are specified under the Energy STAR standards to be acceptable for receiving an IRS tax credit include "biomass stoves," devices for "heating, ventilating, air conditioning (HVAC)" functions, "insulation" materials, ""roofs (metal & asphalt)," "water heaters (non-solar)," "windows & doors," "geothermal heat pumps," "small wind turbines (residential)," "solar energy systems," and "fuel cells (residential fuel cell and microturbine system)."

Biomass stoves, HVAC devices, insulation material, metal and asphalt roofs, non-solar water heats, windows and doors all can receive an IRS tax credit of an amount no higher than $1,500, as can be determined based on thirty percent of the cost.

Geothermal heat pumps, small residential wind turbines, and solar energy systems can also receive an IRS tax credit of thirty percent of the cost incurred in their purchase, but without any limit. An IRS tax credit of thirty percent can be gained for each half kilowatt of a fuel cell's capacity, for individual amounts of up to $500.

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