The government’s latest stimulus package offers programs and tax credits that increase the affordability of energy efficient home improvements.

The official name of the package is The American Recovery and Reinvestment Act of 2009.  It offers tax credits and rebates designed to improve energy efficiency in existing homes. The tax credits will cover up to 30% of the purchase price of new high-efficiency water heaters, windows, and air conditioners, and for adding insulation, up to a $1,500 total per household. To qualify, an item must be 15% to 20% more efficient than the standard model. If you want to install a solar energy system or small wind energy system, the government will reward you with a 30 percent tax credit – uncapped.

Just need a new washer or refrigerator? States will receive $300 million in rebates from the federal government for the purchase of energy efficient appliances. While this program is still in the works, states like New Jersey that already have a rebate program are likely to reap benefits sooner. Pennsylvania has not yet established such a program.

At the state level, Governor Rendell recently announced $16 million in low-interest loans and $1 million in rebates to be distributed through Keystone HELP (benefits households with combined incomes of $150k or less) for the purchase of high-efficiency heating and cooling systems, geothermal heat pumps, insulation, and new windows and doors.

Consumers should also be aware of a PA Solar Incentive Program in the works. It could mean $6,000 to $7,500 in rebates towards a solar system in a typical house. Combined with federal credits, consumers could expect to receive a total of $12,000 to $13,500 for a $20,000 system.

Bottom Line: If you are planning any energy-saving improvements, take time to sort out the criteria for qualifying products and services. To corral serious cash benefits from the stimulus package, consumers will have to seek it out and be very careful to get what qualifies. Here are a few links to help you get started:

US Energy Star Program – www.energystar.gov
Scroll down to the lower-left box labeled “Tax Credits for Energy Efficiency”

Tax Incentives Assistance Project – www.energytaxincentives.org
Nonprofit program explains incentive programs

Keystone HELP – www.keystonehelp.com
Pennsylvania’s Special Loan and Rebate Program for Energy Efficiency Home Improvements

Energy Coordinating Agency in Philadelphia – www.energywisepa.org
Lists resources, contractors, and auditors.