Feds offer less for energy-efficient home improvements in 2011

Just as remodeling is picking up again, tax credits from Uncle Sam have decreased. The compromise tax bill passed by Congress in late December cut federal energy tax credits from a generous 30 percent in 2010 to 10 percent this year and put caps on some big-ticket items like furnaces ($150) and windows ($200). Solar, geothermal and wind energy systems still qualify for 30 percent tax credits, but those home improvements have high upfront costs and long payback times. 

Here's a quick summary of the new tax credits. You can find out more at EnergyStar.gov and the Americans Council for an Energy-Efficient Economy. Improvements must be made to a homeowner's principal residence; new construction and rental properties do not qualify.

• Gas, oil and propane-fueled oil furnaces and boilers: 10 percent of cost, including installation, with a $150 maximum credit. All equipment must have an AFUE efficiency rating of 95 or above.
• Central air conditioning systems and air source heat pumps: 10 percent of cost, including installation, with a $300 maximum credit.
• Exterior windows, doors, and skylights: 10 percent of cost, including installation, with a $200 maximum credit. Any EnergyStar window qualifies.
• Water heaters: 10 percent of cost, not including installation, with a $300 maximum credit. 
• Biomass stoves: 10 percent of cost, not including installation, with a $300 maximum credit.
• Reflective roofs: 10 percent of cost, not including installation, with a $500 maximum credit. Eligible types include metal roofs with pigmented coatings or asphalt shingles with cooling granules.
• Insulation, duct sealing and infiltration reduction: 10 percent of cost, not including installation, with a $500 maximum credit. Products ranging from fiberglass roll insulation to caulking and expanding spray foam are eligible.

To collect a credit, make sure you save your receipts and the Manufacturer's Certification Statement for your records and submit Form 5695 with your taxes next year.

--Reporting by Gian Trotta

—Aaron Bailey