Tax Credits for Energy Efficient Tankless Water Heaters

The federal government is offering a tax credit incentive of 30% of the cost of purchasing and installing a new tankless water heater with an Energy Factor (EF) of at least .82 , or a thermal efficiency of at least 90%, for improvements placed in service from January 1, 2009 through December 31, 2010. The maximum tax credit you can receive for all energy efficient home improvement during this time period is $1500. See below for further details.

Tankless water heaters are good for your wallet and the planet. They not only produce up to 50% less greenhouse gas emissions than storage tank heaters, but use significantly less energy by heating water only when you need it.

Standard, old-fashioned storage tank heaters use more energy because they heat water continuously, whether it is being used or not. That's like leaving your car idling in the driveway 24 hours a day. Bosch tankless water heaters have EFs as much as 20 points higher than even the best storage tank heaters.

Only gas tankless water heaters with an EF of at least 0.82, as certified by the U.S. Department of Energy, qualify for the tax credit. The Bosch AquaStar product line includes seven powerful, energy-efficient tankless water heaters above the 0.82 EF minimum: 2700ES-LP, 2700ES-NG, 2400ES-LP, 2400ES-NG.

Guidelines for the Tax Credit can be viewed on the ENERGY STAR website.

Home Improvements

Home improvement tax credits are available for energy-saving home improvements placed in service from January 1, 2009 through December 31, 2009. Any home improvements made in 2008 are not eligible for the tax credit.

Home improvement tax credits are available for insulation, replacement windows, non-solar water heaters, and certain high efficiency heating and cooling equipment. The maximum amount that a taxpayer may claim from all of these tax credits combined is $500 over the lifetime of the tax credit (2006, 2007 & 2009).

If you are building a new home, you do not qualify for the tax credits for “eligible building envelope components” (windows, doors, insulation, roofs) or “qualified energy property” (HVAC & non-solar water heaters). However, the tax credit for photovoltaics, solar water heaters, small wind systems, and fuel cells is available for homeowners building new homes.

Internal Revenue Service (IRS) guidance for consumers can be viewed here: IRS Notice 2006-26