New Windows, or tax credits and incentives on behavior

Who says tax policy does not provide incentives or disencentives to action.

Thanks to The Energy Policy Act of 2005, I will receive a tax credit for upgrading the windows of my house this year.

The existing windows were original to the house or very close to it - aluminum frame single pane that leached heat like a sieve, complete with winter condensation and frost buildup. Clearly a waste of energy.

Thanks to the Energy Policy Act, I'm going to get a nice $200 tax credit for replacement of the windows, as the credit is for $200 or 10%, whichever is less, and in this case the $200 was definetly less. Regardless, its certainly a nice benefit that certainly encouraged me to spend the money now to get the upgrade, and as a result not only do I get a $200 credit, but I also get the savings from lower energy costs and consumption (which is the point of the Act after all), and the house looks a lot better.

An unanticipated benefit of this Act is because my A/C decided to die off this year, during the hottest part of the summer, I'm going to get a credit on its replacement. The A/C unit was apparently 17 years old and decided it had worked long enough. I replaced it and voila, not only do I garner the efficiency of newer cooling technoogy and lower power consumption, but also a tax credit.

The Act certainly helps incentivize people (at least in my case) to make their homes more energy efficient, which is a good thing, and if people can save on their taxes while doing so - even better!