Federal Tax Credit for Energy Efficiency on Heating, Furnaces, and Boilers

forced air furnace

The Federal Tax Credit for Energy Efficiency – Heating, Furnaces, and Boilers expired in 2011. The President chose not too extend this tax credit. Local energy utility companies like PG&E have their own energy efficiency rebates. To find out if rebates or other incentives are available in your area, visit the ENERGY STAR Rebate Finder.

Be sure to read our article on ways to save money and energy on your energy bill.

For 2011, the Federal Tax Credit for energy efficiency drops to 10%, up to a $500 maximum. (2010 Federal Tax Credit information)

  • Oil and gas furnace and boiler incentives are $150
  • Additional $50 for efficient furnace fans
  • Oil furnaces, boilers, and gas boilers must be 95% efficient. (It was 90% in 2010)
  • $300 cap for air conditioners
  • Existing home and principal residence.   New construction and rentals do not qualify.
  • Expires December 31, 2011 – Consult the What other rebates are available? below for other possible rebates.

The 2011 tax credit reverted to  2005-2008 levels. Anyone who previously took advantage of the program can’t apply for incentives that exceed $500.  IE If you claimed $500 between 2005 – 2008 on a previous energy efficiency project, or at least $500 tax credit from 2009 – 2010, you are ineligible for the 2011 energy efficiency tax credit.

If you used say $200 of the $500 energy efficiency tax credit from 2005 – 2008, and did not utilize the 2009 – 2010 energy efficiency tax credit, you would still have a $300 credit available.

If you have been thinking about replacing these items, you might as well upgrade now and save some money. Furnaces 15 years old or older can be replaced with much more efficient units. New models with electric ignition are the most efficient models.

Natural Gas or Propane Furnaces must have Annual Fuel Utilization Efficiency or
AFUE >= 95% to qualify for the tax credit. Oil Furnaces and as, Propane, or Oil Hot Water Boiler must have AFUE >= 95%. Not all ENERGY STAR products will qualify for the tax credit.

Gas fired furnace list. Here is a list of qualifying oil furnaces and oil boilers that may qualify. Also consider installing radiant floor heating instead of using a furnace.


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