On February 17, 2009, President Obama signed a stimulus bill (The American Recovery and Reinvestment Act of 2009) that made some significant changes to the energy efficiency tax credits.

The highlights are:

• The tax credits that were previously effective for 2009, have been extended to 2010 as well.
• The tax credit has been raised from 10% to 30%.
• The tax credits that were for a specific dollar amount (ex $300 for a CAC), have been converted to 30% of the cost.
• The maximum credit has been raised from $500 to $1500 for the two years (2009-2010). However, some improvements such as geothermal heat pumps, solar water heaters, and solar panels are not subject to the $1,500 maximum.
• The $200 cap on windows has been removed, but the requirements for windows has been increased significantly. Not all ENERGY STAR qualified windows will qualify.

Energy Star has published comprehensive information on how consumers can take advantage of the federal tax credits for energy-efficient home improvements in the new economic stimulus package.

The credits are expected to significantly increase demand for green renovation projects this year and next, according to federal officials. Congressional economists project that the new provisions will generate an estimated $6 billion in remodeling work by the end of 2010.