17-A-i

APPENDIX 17-A. REGULATORY IMPACT ANALYSIS: SUPPORTING 

MATERIALS 

TABLE OF CONTENTS

17-A.1 INTRODUCTION ............................................................................................ 17-A-1

17-A.2 NIA-RIA INTEGRATED MODEL.................................................................. 17-A-1

17-A.3 CONSUMER REBATE POLICY MARKET PENETRATION CURVES ..... 17-A-2

17-A.3.1 Introduction ....................................................................................................... 17-A-2

17-A.3.2 Adjustment of XENERGY Penetration Curves ................................................ 17-A-3

17-A.3.3 Interpolation of Penetration Curves .................................................................. 17-A-4

17-A.3.3.1 Market Implementation Rate Function and Curves ..................... 17-A-5

17-A.3.3.2 Calibrating the Market Implementation Rate Function ............... 17-A-8

17-A.3.3.3 Limits to the Interpolation Approach ......................................... 17-A-10

17-A.4 MARKET SHARE ANNUAL INCREASES BY POLICY ........................... 17-A-12

17-A.4.1 Market Share Increases for Residential Clothes Dryers ................................. 17-A-12

17-A.4.2 Market Share Increases for Room Air Conditioners ...................................... 17-A-14

17-A.5 UTILITY REBATE PROGRAMS ................................................................. 17-A-17

17-A.5.1 Rebate Programs for Residential Clothes Dryers ........................................... 17-A-17

17-A.5.2 Rebate Programs for Room Air Conditioners................................................. 17-A-20

17-A.6 FEDERAL AND STATE TAX CREDITS .................................................... 17-A-24

17-A.6.1 Federal Tax Credits for Consumers of Residential Appliances ...................... 17-A-24

17-A.6.2 Federal Tax Credits for Manufacturers ........................................................... 17-A-25

17-A.6.3 State Tax Credits ............................................................................................. 17-A-25

LIST OF TABLES

Table 17-A.3.1 Parameter Values for Reference Curves .................................................. 17-A-7

Table 17-A.3.2 Correspondence between Discrete and Continuous Values of Market 

Barrier Levels........................................................................................... 17-A-9

Table 17-A.3.3 Coefficients of Continuous-value Functions of max, mid, fit and r ......... 17-A-9

Table 17-A.4.1 Annual Increases in Market Shares Attributable to Consumer Rebates, 

Consumer Tax Credits, and Manufacturer Tax Credits Policies for 

Clothes Dryers ....................................................................................... 17-A-13

Table 17-A.4.2 Annual Increases in Market Shares Attributable to Voluntary Energy 

Efficiency Targets, Early Replacement, and Bulk Government 

Purchases Policies for Clothes Dryers ................................................... 17-A-14

Table 17-A.4.3 Annual Increases in Market Shares Attributable to Consumer Rebates, 

Consumer Tax Credits, and Manufacturer Tax Credits Policies for 

Room Air Conditioners .......................................................................... 17-A-15

Table 17-A.4.4 Annual Increases in Market Shares Attributable to Voluntary Energy 

Efficiency Targets, Early Replacement, and Bulk Government 

Purchases Policies for Room Air Conditioners ..................................... 17-A-16

Table 17-A.5.1 Rebates for Gas Clothes Dryers ............................................................. 17-A-18

Table 17-A.5.2 Rebates for Electric Clothes Dryers ....................................................... 17-A-19
17-A-ii

Table 17-A.5.3 Rebates for Electric Combination Washer-Dryers ................................ 17-A-19

Table 17-A.5.4 Rebates for Room Air Conditioners ...................................................... 17-A-21

LIST OF FIGURES

Figure 17-A.3.1 S-Curves Showing Effects of External and Internal Sources on 

Adoption of New Technologies ............................................................... 17-A-3

Figure 17-A.3.2 Market Implementation Curves for Five Market Barriers Reference 

Levels ....................................................................................................... 17-A-6

Figure 17-A.3.3 Discrete-value Functions of Parameters Driving Implementation Curve 

Shape ........................................................................................................ 17-A-7

Figure 17-A.3.4 Continuous-value Functions of Parameters Driving Implementation 

Curve Shape ........................................................................................... 17-A-10
17-A-1

APPENDIX 17-A. REGULATORY IMPACT ANALYSIS: SUPPORTING MATERIALS 

17-A.1 INTRODUCTION

 This appendix contains sections discussing the following topics: 

• NIA-RIA Integrated Models 

• XENERGY penetration curves used to analyze consumer rebates, including: 

o Background material,

o DOE’s adjustment of these curves for this analysis, and 

o DOE’s new method for interpolating the curves 

• Detailed tables of rebates offered for the considered products 

• Background material on Federal and state tax credits for appliances

17-A.2 NIA-RIA INTEGRATED MODEL

 For this analysis, DOE developed an integrated NIA-RIAa

 

a NIA = national impact analysis; RIA = regulatory impact analysis

 model approach that built on 

the NIA models discussed in Chapter 10 and documented in Appendix 10-A.The resulting NIARIA models, one for clothes dryers and one for room air conditioners, featured both the NIA 

analysis inputs and results and the RIA inputs with capability to generate results for each of the 

RIA policies. A separate module produced summaries of inputs for the rebate policy, generated 

their penetration curves (discussed in section 17-A.3.3 below), reported shipment and market 

share increase data by product class, and produced summary tables for the national energy 

savings and net present value results reported in chapter 17, sections 17.4 and 17.5. This module 

also generated tables of market share increases for each policy reported in section 17-A.4 of this 

Appendix.
17-A-2

17-A.3 CONSUMER REBATE POLICY MARKET PENETRATION CURVES

This section first discusses the theoretical basis for the market penetration curves that 

DOE used to analyze the Consumer Rebates policy. Next it discusses the adjustments it made to 

the maximum penetration rates. It then presents the method it developed to create interpolated 

penetration curves for each specific product class and efficiency level in the analysis. Examples 

of the resulting curves for the most common clothes dryer and room air conditioner product 

classes are in chapter 17, section 17.3.2.1. The curves for the product classes in the remaining 

product classes are in section 17-A.3.4 below. 

17-A.3.1 Introduction

XENERGY, Inc.b, developed a re-parameterized, mixed-source information diffusion 

model to estimate market impacts induced by financial incentives for purchasing energy efficient 

appliances.1 The basic premise of the mixed-source model is that information diffusion drives 

the adoption of technology. 

Extensive economic literature describes the diffusion of new products as technologies 

evolve. Some research focuses primarily on developing analytical models of diffusion patterns 

applicable to individual consumers or to technologies from competing firms.2, 3, 4 One study 

records researchers’ attempts to investigate the factors that drive diffusion processes.5 Because a 

new product generally has its own distinct characteristics, few studies have been able 

conclusively to conclusively develop a universally applicable model. Some key findings, 

however, generally are accepted in academia and industry. 

One accepted finding is that, regardless of their economic benefits and technological 

merits, new technologies are unlikely to be adopted by all potential users. For many products, a 

ceiling must be placed on the adoption rate. A second conclusion is that not all adopters purchase 

new products at the same time: some act quickly after a new product is introduced; others wait 

for the product to mature. Third, diffusion processes can be characterized approximately by 

asymmetric S-curves that depict three stages of diffusion: starting, accelerating, and decreasing 

(as the adoption ceiling is approached). 

A so-called epidemic model of diffusion is used widely in marketing and social studies. 

The epidemic model assumes that (1) all consumers place identical value on the benefits of a 

new product, and (2) the cost of a new product is constant or declines monotonically over time. 

What induces a consumer to purchase a new product is information about the availability and 

benefits of the product. In other words, information diffusion drives consumers’ adoption of a 

new product.

3

 The model incorporates information diffusion from both internal sources (spread 

by word of mouth from early adopters to prospective adopters) and external sources (the 

“announcement effect” produced by government agencies, institutions, or commercial 

 

b XENERGY is now owned by KEMA, Inc. (www.kema.com) 
17-A-3

advertising). The model incorporates both internal and external sources by combining a logistic 

function with an exponential function.4,5 

The relative degree of influence from the internal and external sources determines the 

general shape of the diffusion curve for a specific product.4,5

 If adoption of a product is 

influenced primarily by external sources of information (the announcement effect), for instance, 

a high rate of diffusion occurs at the beginning of the process. In this scenario, external sources 

provide immediate information exposure to a significant number of prospective adopters. In 

contrast, internal sources (such as a network of prospective adopters) are relatively small in size 

and reach, producing a more gradual exposure to prospective adopters. Graphically speaking, 

information diffusion dominated by external sources is represented by a concave curve (the 

exponential curve in Figure 17-A.3.1). If adoption of a new product is influenced most strongly 

by internal sources of information, the number of adopters increases gradually, forming a convex 

curve (the logistic curve in Figure 17-A.3.1).

Figure 17-A.3.1 S-Curves Showing Effects of External and Internal Sources on 

Adoption of New Technologies

17-A.3.2 Adjustment of XENERGY Penetration Curves

In consultation with the primary authors of the 2002 XENERGY study who later 

conducted similar California studies, DOE made some adjustments to XENERGY’s original 
17-A-4

implementation (penetration) curves.

6

The experiences with utility programs since the 

XENERGY study indicate that incentive programs have difficulty achieving penetration rates as 

high as 80 percent. Consumer response is limited by barriers created by consumer utility issues 

and other non-economic factors. DOE therefore adjusted the maximum penetration parameters 

for some of the curves from 80 percent to the following levels: 

Moderate Barriers: 70% 

High Barriers: 60% 

Extremely High Barriers: 50% 

The low barriers and no barriers curves (the latter used only when a product has a very 

high base-case-market share) remained, respectively, with 80 percent and 100 percent as their

maximum penetration rates. For the interpolated penetration curves (discussed below), DOE set 

the no barriers and extremely high barriers curves as the upper and lower bounds, respectively, 

for any benefit/cost ratio points higher or lower than the curves. It set another constraint such 

that the policy case market share cannot be great than 100 percent, as might occur for products 

with high base case market shares of the target-level technology.

17-A.3.3 Interpolation of Penetration Curves

As discussed above, the XENERGY penetration (implementation) curves followed a 

functional form to estimate the market implementation rate caused by energy efficiency 

measures such as consumer rebates.

c The XENERGY report presents five reference market 

implementation curves that vary according to the level of market barriers to technology 

penetration.

1

 Such curves have been used by DOE in the Regulatory Impact Analyses for 

rulemakings for appliance energy efficiency standards to estimate market share increases in

response to rebate programs.d They provide a framework for evaluating technology penetration, 

yet require matching the studied market to the curve that best represents it. This approximate 

matching can introduce some inaccuracy to the analysis. 

This section presents an alternative approach to such evaluation: a method to estimate market 

implementation rates more accurately by performing interpolations of the reference curves. The 

following describes the market implementation rate function and the reference curves, the 

method to calibrate the function to a given market, and the limitations of the method.

 

c The RIA chapter refers to these curves as penetration curves. This section, in references to the original source, uses 

the term implementation curve. 

d DOE has also used this method to estimate market share increases resulting from consumer tax credit and

manufacturer tax credit programs, since the effects of tax credits on markets can be considered proportional to the 

rebate impacts. 
17-A-5

17-A.3.3.1 Market Implementation Rate Function and Curves

The XENERGY curves employ the following functional form to estimate the percentage of 

the informed markete that will accept each energy-efficiency measure based on the participant’s 

benefit/cost ratio: 

imp(bc) = max

�1 + e

−ln�bc

4 �

� ∙ (1 + e−�it∙ln(mid∙bc) ) [1] 

where:

imp implementation rate

bc benefit/cost ratio

max maximum annual acceptance rate for the technology

mid inflection point of the curve 

fit parameter that determines the general shape (slope) of the curve.

In recent efficiency standards rulemakings, DOE has been adopting a slightly different 

functional form of Equation [1], where the constant value 1/4 is replaced by a parameter r. By 

introducing this parameter in Equation [1] and rewriting it without the exponential and 

logarithmic operators, the market implementation rate of rebate programs can be evaluated using 

the following equation: 

imp(bc) = max

�1 + 1

r ∙ bc� ∙ (1 + (mid ∙ bc)−fit ) [2] 

In XENERGY’s report, Equation [1] is used to generate five primary (reference) curves. 

These curves produce initial theoretical results that are calibrated to actual measure 

implementation results associated with the first year of major utility energy efficiency programs. 

Different curves, generated using distinct values of the parameters max, mid, fit and r, reflect 

different levels of market barriers for different efficiency measures. 

DOE has been using similar curves in the appliance efficiency standards rulemaking. The 

curves characterize market implementation rates for five reference levels of market barriers: No 

Barriers, Low Barriers, Moderate Barriers, High Barriers, and Extremely High Barriers. Figure 

17-A.3.2 presents the five reference curves. 

 

e The informed market refers to the portion of the market aware and informed about the energy efficiency measure. 
17-A-6

Figure 17-A.3.2 Market Implementation Curves for Five Market Barriers 

Reference Levels

The reference curves build on the following functional form: 

imp(bd, bc) = maxd(bd)

(1 + rd(bd) ∙ bc) ∙ (1 + (midd(bd) ∙ bc)−fitd(bd) ) [3] 

where:

 bd = [barrier type]

and maxd(bd), midd(bd), fitd(bd) and rd(bd) are as shown in Table 17-A.3.1. The four 

parameters are also presented in Figure 17-A.3.3 as discrete-value functions. 

No Barriers

Low Barriers

Moderate 

Barriers

High Barriers

Extremely High 

Barriers

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1.0

0 20 40 60 80 100

implementation rate

benefit-cost ratio
17-A-7

Table 17-A.3.1 Parameter Values for Reference Curves

Market Barriers Level

No Barriers Low Barriers Moderate 

Barriers High Barriers Extremely High Barriers

maxd 1.0 0.8 0.7f 0.6g 0.5

midd 10 2 0.3 0.1 0.04

fitd 1 1.7 1.7 1.7 1.7

rd 1 0.5 0.25 0.25 0.25

Figure 17-A.3.3 Discrete-value Functions of Parameters Driving Implementation 

Curve Shape

To estimate the barrier level of a given market, in the past DOE sought the reference 

curve that most closely represented the pair (base case market share, benefit/cost ratio) of the 

technology corresponding to the mandatory standard’s chosen efficiency level. It then estimated 

 

f DOE adopted these parameters for the Refrigeration Products RIA, as discussed in section 17-A.3.2, after 

consultation with the implementation curve authors. For the RIAs for the rulemakings for Cooking Products and 

Commercial Clothes Washers the max value adopted for the moderate barriers and high barriers market barrier 

levels was 0.5. RIAs developed during prior rulemakings for Furnaces and Boilers, Commercial Unitary Air 

Conditioners and Heat Pumps, and Distribution Transformers used a max value of 0.8 for all but the no barriers

curve, based on the original penetration curve values from XENERGY’s report. 

0.0

0.2

0.4

0.6

0.8

1.0

1.2

No Low Moderate High X-High

Max

0.0

2.0

4.0

6.0

8.0

10.0

12.0

No Low Moderate High X-High

Mid

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2.0

No Low Moderate High X-High

Fit

0.0

0.2

0.4

0.6

0.8

1.0

1.2

No Low Moderate High X-High

r
17-A-8

the effect of a rebate program on the technology market penetration using that curve. For this 

estimation, DOE calculated the increase in market share that an increase in the benefit/cost ratio 

– driven by a rebate program – would produce. It then assumed that the relative increase in 

market share calculated from the reference curve was a proxy to the effects of a rebate program 

on the studied market. 

17-A.3.3.2 Calibrating the Market Implementation Rate Function

The procedure previously described lacks accuracy when the studied market penetration 

point based on the actual benefit/cost ratio does not lie close to one of the reference curves. This 

section presents an interpolation approach to eliminate such inaccuracy. The interpolation 

process provides intermediate, continuous values for the four parameters (max, mid, fit and r) 

driving the market implementation curves. These intermediate values are obtained after linear 

interpolation of their corresponding reference values. 

The four parameters (max, mid, fit and r) were previously defined as discrete-value functions 

(maxd(bd), midd(bd), fitd(bd) and rd(bd)) of the market barriers level (Table 17-A.3.1, Figure 17-

A.3.2). To facilitate the interpolation, it is necessary to transform the four discrete-value 

functions into continuous functions, the latter being thus capable of associating each of the four 

parameters to a real number denoting the market barrier level (bc∈R). A numeric, continuous 

scale for the market barriers level is proposed, ranging from 0 to 5 (bc∈[0,5]). The 

correspondence between the discrete-values of market barrier levels and bc are shown in Table 

17-A.3.2. 

Based on the continuous-value market barriers level, the parameters max, mid, fit and r are 

interpolated using the following functions: 

maxc(bc) =∝max (bc) ∙ bc + βmax(bc) [4] 

midc(bc) =∝mid (bc) ∙ bc + βmid(bc) [5] 

fitc(bc) =∝fit (bc) ∙ bc + βfit(bc) [6] 

rc(bc) =∝r (bc) ∙ bc + βr(bc) [7] 

where ∝x (bc) and βx(bc) are shown in Table 17-A.3.3. 

The continuous-value functions defined for max, mid, fit and r, as expressed by Equations 

[4]-[7], are then substituted in Equation [3], leading to the following functional form for the 

market implementation rate of rebate programs: 

imp(bc, bc) = maxc(bc)

(1 + rc(bc) ∙ bc) ∙ (1 + (midc(bc) ∙ bc)−fitc(bc) ) [8] 
17-A-9

Table 17-A.3.2 Correspondence between Discrete and Continuous Values of Market 

Barrier Levels

Market Barriers Level

No 

Barriers

Low 

Barriers

Moderate 

Barriers

High 

Barriers

Extremely 

High 

Barriers

bc 0.0 1.0 2.5 4.0 5.0 

Table 17-A.3.3 Coefficients of Continuous-value Functions of max, mid, fit and r

Market Barriers Level Intervals

No-Low 

Barriers

Low-Moderate 

Barriers

Moderate-High 

Barriers

High-Extremely 

High Barriers

b∈[0,1] b∈[1,2.5] b∈[2.5,4] b∈[4,5]

Max

∝max (bc) -0.200 -0.075 -0.075 -0.075 

βmax(bc) 1.000 0.875 0.875 0.875 

Mid

∝mid (bc) -8.000 -1.133 -0.133 -0.060 

βmid(bc) 10.000 3.133 0.633 0.340 

Fit

∝fit (bc) 0.700 0.000 0.000 0.000 

βfit(bc) 1.000 1.700 1.700 1.700 

R

∝r (bc) -0.500 -0.167 0.000 0.000 

βr(bc) 1.000 0.667 0.250 0.250 
17-A-10

Figure 17-A.3.4 presents the four continuous-value functions. 

Figure 17-A.3.4 Continuous-value Functions of Parameters Driving 

Implementation Curve Shape

Hence, estimating the market effects of a rebate program relies on finding the interpolated

implementation curve that best represents the studied market. In other words, it involves finding 

bc such that the pair (imp(bc,bc), bc) equals the pair (base case market share, benefit/cost ratio) 

of the technology corresponding to the mandatory standard’s efficiency level. Once the 

appropriate value of bc is found (e.g. bc = bc

∗ ), the market penetration of the technology under a 

rebate program can be calculated by the following equation:

imp(bc

∗, bc∗) = maxc(bc

∗)

(1 + rc(bc

∗) ∙ bc∗) ∙ (1 + (midc(bc∗) ∙ bc∗)−fitc(bc

∗ ) ) [9] 

where:

bc

∗ market barriers level corresponding to the studied market 

bc∗ benefit/cost ratio with rebate.

17-A.3.3.3 Limits to the Interpolation Approach

The approach presented above increases the accuracy of the estimate of the market 

implementation rate resulting from a rebate program. Consequently, it improves the analysis of 

the market effects of rebate programs. However, whereas it is feasible to develop interpolated 

0.0

0.2

0.4

0.6

0.8

1.0

1.2

0 1 2 3 4 5

Max

0

2

4

6

8

10

12

0 1 2 3 4 5

Mid

1.0

1.2

1.4

1.6

1.8

2.0

0 1 2 3 4 5

Fit

0.0

0.2

0.4

0.6

0.8

1.0

1.2

0 1 2 3 4 5

r
17-A-11

implementation curves between the reference ones, there is no empirical support to extrapolate 

them beyond the No Barriers and the Extremely High Barriers curves. In fact, the theoretical 

boundaries for the market barriers level would be: 

(a) Zero Barriers (b0): With the assumption of the rational consumer, a tiny increase in the 

benefit/cost ratio of a technology with that ratio greater than 1 would be sufficient to make the 

technology widely adopted.g This would result in the following implementation rate function:

imp(b0, bc) = �

0, bc < 1

1, bc > 1 

(b) Infinite Barriers (b∞): In this case, even an extremely high benefit/cost ratio would not be 

sufficient to cause the market to adopt a technology. This would result in the following 

implementation rate function: 

imp(b∞, bc) = 0, ∀bc 

However, notwithstanding the existence of such theoretical boundaries, the analysis of 

market implementation rates in cases of markets where the base case market share is either 

higher than the market share in the No Barriers curve (for the corresponding benefit/cost ratio), 

or lower than the one in the Extremely High Barriers curve (idem), should follow the former 

analysis approach (as described at the end of section 17-A.3.3.2). It should rely, respectively, on 

the No Barriers or the Extremely High Barriers curves to estimate a relative market increase due 

to the rebate program. 

 

g When the benefit/cost ratio is 1 the participant is indifferent to adopting the technology or not, and the 

implementation rate, in this case, would be undetermined.
17-A-12

17-A.4 MARKET SHARE ANNUAL INCREASES BY POLICY

This section presents the annual increases in market shares for clothes dryers and room 

air conditioners due to the non-regulatory policies. DOE used these market share increases as 

inputs to the NIA-RIA spreadsheet models.

17-A.4.1 Market Share Increases for Residential Clothes Dryers

For the consumer rebate, consumer tax credit, and manufacturer tax credit policies, Table 

17-A.4.1 shows the annual increases in market shares for vented electric standard and vented gas 

clothes dryers meeting target efficiency levels. 
17-A-13

Table 17-A.4.1 Annual Increases in Market Shares Attributable to Consumer Rebates, 

Consumer Tax Credits, and Manufacturer Tax Credits Policies for 

Clothes Dryers 

Year

Consumer

Rebates

Consumer

Tax Credits

Manufacturer

Tax Credits

Vented 

Electric 

Standard

%

Vented Gas 

%

Vented 

Electric 

Standard

%

Vented Gas 

%

Vented 

Electric 

Standard

%

Vented Gas 

%

2014 50.7 50.9 30.4 30.5 15.2 15.3

2015 50.7 50.9 30.4 30.5 15.2 15.3

2016 50.7 50.9 30.4 30.5 15.2 15.3

2017 50.7 50.9 30.4 30.5 15.2 15.3

2018 50.7 50.9 30.4 30.5 15.2 15.3

2019 50.7 50.9 30.4 30.5 15.2 15.3

2020 50.7 50.9 30.4 30.5 15.2 15.3

2021 50.7 50.9 30.4 30.5 15.2 15.3

2022 50.7 50.9 30.4 30.5 15.2 15.3

2023 50.7 50.9 30.4 30.5 15.2 15.3

2024 50.7 50.9 30.4 30.5 15.2 15.3

2025 50.7 50.9 30.4 30.5 15.2 15.3

2026 50.7 50.9 30.4 30.5 15.2 15.3

2027 50.7 50.9 30.4 30.5 15.2 15.3

2028 50.7 50.9 30.4 30.5 15.2 15.3

2029 50.7 50.9 30.4 30.5 15.2 15.3

2030 50.7 50.9 30.4 30.5 15.2 15.3

2031 50.7 50.9 30.4 30.5 15.2 15.3

2032 50.7 50.9 30.4 30.5 15.2 15.3

2033 50.7 50.9 30.4 30.5 15.2 15.3

2034 50.7 50.9 30.4 30.5 15.2 15.3

2035 50.7 50.9 30.4 30.5 15.2 15.3

2036 50.7 50.9 30.4 30.5 15.2 15.3

2037 50.7 50.9 30.4 30.5 15.2 15.3

2038 50.7 50.9 30.4 30.5 15.2 15.3

2039 50.7 50.9 30.4 30.5 15.2 15.3

2040 50.7 50.9 30.4 30.5 15.2 15.3

2041 50.7 50.9 30.4 30.5 15.2 15.3

2042 50.7 50.9 30.4 30.5 15.2 15.3

2043 50.7 50.9 30.4 30.5 15.2 15.3

 

For the voluntary efficiency targets, early replacement, and bulk government purchases 

policies, Table 17-A.4.2 shows the annual increases in market shares for electric standard and 

vented gas clothes dryers meeting target efficiency levels. 
17-A-14

Table 17-A.4.2 Annual Increases in Market Shares Attributable to Voluntary Energy 

Efficiency Targets, Early Replacement, and Bulk Government Purchases 

Policies for Clothes Dryers 

Year

Voluntary Energy 

Efficiency Targets Early Replacement Bulk Government Purchases

Vented 

Electric 

Standard

%

Vented Gas 

%

Vented 

Electric 

Standard

%

Vented Gas 

%

Vented 

Electric 

Standard

%

Vented Gas 

%

2014 0.0 0.0 2.4 1.9 0.0 0.0

2015 0.5 0.5 2.3 1.9 0.0 0.0

2016 5.0 5.0 2.3 1.9 0.0 0.0

2017 8.0 8.0 2.3 1.9 0.1 0.1

2018 8.8 8.8 2.3 1.9 0.1 0.1

2019 9.8 9.8 2.3 1.8 0.1 0.1

2020 9.8 9.8 2.1 1.7 0.1 0.1

2021 9.8 9.8 2.0 1.6 0.1 0.1

2022 9.9 9.9 1.9 1.5 0.1 0.1

2023 9.9 9.9 1.7 1.4 0.2 0.1

2024 9.9 9.9 1.6 1.2 0.2 0.1

2025 9.9 9.9 1.4 1.1 0.2 0.1

2026 10.0 10.0 1.3 1.0 0.2 0.1

2027 10.0 10.0 1.2 0.9 0.2 0.1

2028 10.0 10.0 1.0 0.8 0.2 0.1

2029 10.0 10.0 0.9 0.7 0.2 0.1

2030 10.2 10.2 0.8 0.7 0.2 0.1

2031 10.4 10.4 0.7 0.6 0.2 0.1

2032 10.6 10.6 0.6 0.5 0.2 0.1

2033 10.8 10.8 0.6 0.4 0.2 0.1

2034 11.0 11.0 0.5 0.4 0.2 0.1

2035 11.2 11.2 0.4 0.3 0.2 0.1

2036 11.4 11.4 0.4 0.3 0.2 0.1

2037 11.6 11.6 0.3 0.3 0.2 0.1

2038 11.8 11.8 0.3 0.2 0.2 0.1

2039 12.0 12.0 0.2 0.2 0.2 0.1

2040 12.2 12.2 0.2 0.2 0.2 0.1

2041 12.4 12.4 0.2 0.1 0.2 0.1

2042 12.6 12.6 0.2 0.1 0.2 0.1

2043 12.8 12.8 0.1 0.1 0.2 0.1

 

17-A.4.2 Market Share Increases for Room Air Conditioners 

 For the consumer rebate, consumer tax credit, and manufacturer tax credit policies, Table 

17-A.4.3 shows the annual increases in market shares for room air conditioners meeting target 

efficiency levels. 
17-A-15

Table 17-A.4.3 Annual Increases in Market Shares Attributable to Consumer Rebates, 

Consumer Tax Credits, and Manufacturer Tax Credits Policies for Room 

Air Conditioners 

Year

Consumer

Rebates

Consumer

Tax Credits

Manufacturer

Tax Credits

Vented 

Electric 

Standard

%

Vented Gas 

%

Vented 

Electric 

Standard

%

Vented Gas 

%

Vented 

Electric 

Standard

%

Vented Gas 

%

2014 1.4 1.2 0.8 0.7 0.4 0.4

2015 1.4 1.2 0.8 0.7 0.4 0.4

2016 1.4 1.2 0.8 0.7 0.4 0.4

2017 1.4 1.2 0.8 0.7 0.4 0.4

2018 1.4 1.2 0.8 0.7 0.4 0.4

2019 1.4 1.2 0.8 0.7 0.4 0.4

2020 1.4 1.2 0.8 0.7 0.4 0.4

2021 1.4 1.2 0.8 0.7 0.4 0.4

2022 1.4 1.2 0.8 0.7 0.4 0.4

2023 1.4 1.2 0.8 0.7 0.4 0.4

2024 1.4 1.2 0.8 0.7 0.4 0.4

2025 1.4 1.2 0.8 0.7 0.4 0.4

2026 1.4 1.2 0.8 0.7 0.4 0.4

2027 1.4 1.2 0.8 0.7 0.4 0.4

2028 1.4 1.2 0.8 0.7 0.4 0.4

2029 1.4 1.2 0.8 0.7 0.4 0.4

2030 1.4 1.2 0.8 0.7 0.4 0.4

2031 1.4 1.2 0.8 0.7 0.4 0.4

2032 1.4 1.2 0.8 0.7 0.4 0.4

2033 1.4 1.2 0.8 0.7 0.4 0.4

2034 1.4 1.2 0.8 0.7 0.4 0.4

2035 1.4 1.2 0.8 0.7 0.4 0.4

2036 1.4 1.2 0.8 0.7 0.4 0.4

2037 1.4 1.2 0.8 0.7 0.4 0.4

2038 1.4 1.2 0.8 0.7 0.4 0.4

2039 1.4 1.2 0.8 0.7 0.4 0.4

2040 1.4 1.2 0.8 0.7 0.4 0.4

2041 1.4 1.2 0.8 0.7 0.4 0.4

2042 1.4 1.2 0.8 0.7 0.4 0.4

2043 1.4 1.2 0.8 0.7 0.4 0.4
17-A-16

 

For the voluntary efficiency targets, early replacement, and bulk government purchases 

policies, Table 17-A.4.4 shows the annual increases in market shares for room air conditioners 

meeting target efficiency levels. 

Table 17-A.4.4 Annual Increases in Market Shares Attributable to Voluntary Energy 

Efficiency Targets, Early Replacement, and Bulk Government Purchases 

Policies for Room Air Conditioners 

Year

Voluntary Energy Efficiency 

Targets Early Replacement Bulk Government Purchases

Vented 

Electric 

Standard

%

Vented Gas 

%

Vented 

Electric 

Standard

%

Vented Gas 

%

Vented 

Electric 

Standard

%

Vented Gas 

%

2014 12.6 12.6 3.0 2.9 0.0 0.0

2015 12.8 12.8 3.3 3.2 0.1 0.1

2016 13.0 13.0 3.4 3.3 0.1 0.1

2017 13.2 13.2 2.9 2.8 0.2 0.2

2018 13.4 13.4 2.6 2.5 0.2 0.2

2019 13.6 13.6 2.3 2.2 0.3 0.3

2020 13.8 13.8 2.0 1.9 0.3 0.3

2021 14.0 14.0 1.7 1.7 0.3 0.3

2022 14.2 14.2 1.5 1.5 0.4 0.4

2023 14.4 14.4 1.3 1.3 0.4 0.4

2024 14.6 14.6 1.2 1.1 0.4 0.4

2025 14.8 14.8 1.0 1.0 0.4 0.4

2026 15.0 15.0 0.9 0.9 0.4 0.4

2027 15.3 15.3 0.8 0.8 0.4 0.4

2028 15.5 15.5 0.7 0.7 0.4 0.4

2029 15.7 15.7 0.6 0.6 0.4 0.4

2030 16.0 16.0 0.5 0.4 0.4 0.4

2031 16.0 16.0 0.4 0.3 0.4 0.4

2032 16.0 16.0 0.4 0.2 0.4 0.4

2033 16.0 16.0 0.3 0.1 0.4 0.4

2034 16.0 16.0 0.3 0.1 0.4 0.4

2035 16.0 16.0 0.2 0.0 0.4 0.4

2036 16.0 16.0 0.2 0.0 0.4 0.4

2037 16.0 16.0 0.1 0.0 0.4 0.4

2038 16.0 16.0 0.1 0.0 0.4 0.4

2039 16.0 16.0 0.1 0.0 0.4 0.4

2040 16.0 16.0 0.1 0.0 0.4 0.4

2041 16.0 16.0 0.0 0.0 0.4 0.4

2042 16.0 16.0 0.0 0.0 0.4 0.4

2043 16.0 16.0 0.0 0.0 0.4 0.4
17-A-17

17-A.5 UTILITY REBATE PROGRAMS 

 This section presents information on rebate programs in effect nationwide for clothes 

dryers and room air conditioners. The tables organize the data for the rebates offered for these 

products. 

17-A.5.1 Rebate Programs for Residential Clothes Dryers

 DOE found 16 organizations, comprising electric utilities and municipal and regional 

agencies, that have rebate programs for gas clothes dryers. The organizations offer 16 rebates for 

models that meet various efficiency criteria. Table 17-A.5.1 provides the organizations’ names, 

states, rebate amounts, whether the rebate applies to standard-size or compact units, efficiency 

levels, and program websites. If there is more than one entry for an organization, that 

organization offers different rebate amounts depending on efficiency level. The average rebate 

amounts for gas clothes dryers, given in 2009$ at the end of the table, are simple averages of the 

individual amounts (rather than being population-weighted). 

For electric clothes dryers, DOE found four rebate programs offered by three

organizations. For electric combination washer-dryers, DOE found only one rebate program. 

Tables 17-A.5.2 and 17-A.5.3 show the rebate programs for the electric clothes dryer product 

classes. 
17-A-18

Table 17-A.5.1 Rebates for Gas Clothes Dryers

Utility State

Rebate 

Amount 

2009$ Website

Alabama Gas Corporation AL 100 http://www.alagasco.com/Residential/Rebates-and-Offers/Natural-Gas-Dryer-Offer-583.html

Southwest Gas Corp. AZ 30 http://www.conservationrebates.com/programs/swg/SWG_AZ_Res.aspx

City of Lompoc Utilities CA 100 http://www.cityoflompoc.com/utilities/conservation/

Black Hills Energy CO 30 http://www.blackhillsenergy.com/services/programs/builders-heateff-co.php#appliance

Florida Public Utilities FL 100 http://www.fpuc.com/Conservation/rebate/rebate_gas_rebates.asp

Gainesville Regional Utilities FL 75 http://www.gru.com/YourHome/Conservation/Energy/Rebates/rangeDryer.jsp

Florida City Gas, Central FL Gas, TECO Peoples Gas FL 100 http://www.floridacitygas.com/UseNaturalGas/RebatesandPromotions.aspx

Florida City Gas, Central FL Gas, TECO Peoples Gas FL 100 http://www.getgasfl.com/rebates/TECO.aspx

Town of Smyrna GA 50 http://www.townofsmyrna.org/utilities/pdf/Natural-Gas-System%20-Rebates.pdf

Sycamore Gas IN 100 http://www.sycamoregas.com/Documents/SG-Rebate-Letter-Form.pdf 

Sycamore Gas IN 200 http://www.sycamoregas.com/Documents/SG-Rebate-Letter-Form.pdf

Lawrenceburg Gas IN 100 http://www.lawrenceburggasco.com/Documents/59.pdf

Lawrenceburg Gas IN 200 http://www.lawrenceburggasco.com/Documents/59.pdf

Southwest Gas Corporation NV 30 http://www.conservationrebates.com/programs/swg/SWG_NV_Res.aspx

CPS Energy TX 100 http://www.cpsenergy.com/Residential/Rebates/Natural_Gas_Rebates/index.asp

Questar Gas UT 30 http://www.thermwise.com/home/ApplianceRebates.html

Burlington Electric Company VT 100 https://www.burlingtonelectric.com/page.php?pid=54&name=owner_occupied_homes

Average (2009$) $90.88 
17-A-19

Table 17-A.5.2 Rebates for Electric Clothes Dryers

Utility State

Rebate 

Amount 

2009$ Website

Morgan County REA CO 50 http://www.mcrea.org/miscellaneous/pdf/APPLIANCE.pdf

Muscatine Power and Water IA 25 http://www.mpw.org/residential_rebates.aspx

Allegheny Power MD 25 http://www.nxtbook.com/nxtbooks/garrisonhughes/empowermaryland2010/#/6

Allegheny Power PA 25 http://www.alleghenypower.com/EngConserv/PA/WattWatchers/RebateCD.asp

Average (2009$) $31.25 

Table 17-A.5.3 Rebates for Electric Combination Washer-Dryers

Utility State

Rebate 

Amount 

2009$ Website

Morgan County REA CO 100 http://www.mcrea.org/miscellaneous/pdf/APPLIANCE.pdf

Average (2009$) $100.00 
17-A-20

17-A.5.2 Rebate Programs for Room Air Conditioners 

 DOE found 61 organizations, comprising electric utilities and municipal and regional agencies 

that offered 62 rebate programs for room air conditioners. The organizations offer rebates for units that 

meet a range of efficiency criteria. Table 17-A.4.4 lists the organizations’ names, states, rebate 

amounts, efficiency levels, and program websites. If there is more than one entry for an organization, 

that organization offers different rebates based on efficiency level. The average rebate amounts, given 

in 2009$ at the end of the table, are simple averages of the individual amounts (rather than being 

population-weighted). The table also shows the adjusted rebate amount for room air conditioners, as 

discussed in chapter 17, section 17.3.2.2. 
17-A-21

Table 17-A.5.4 Rebates for Room Air Conditioners

Utility or Agency State

Rebate 

Amount 

2009$

Efficiency 

Level Website

LADWP CA 50 E* http://www.ladwp.com/ladwp/cms/ladwp000478.jsp 

PG&E CA 50 E* http://www.pge.com/myhome/saveenergymoney/rebates/appliance/clothes/index.shtml

SCE CA 50 E* http://www.sce.com/residential/rebates-savings/appliance/fridge-freezer-recycling.htm

SDG&E CA 50 E* http://www.sdge.com/residential/centralFurnace.shtml 

Anaheim Public Utilities CA 50 E* http://www.anaheim.net/utilities/adv_svc_prog/nrg_star/flyer.pdf

Burbank Water & Power CA 75 E* http://www.burbankwaterandpower.com/download/Home-Rewards-Rebate-Form-Web.p

Burbank Water & Power CA 50 E* http://www.burbankwaterandpower.com/download/Home-Rewards-Rebate-Form-Web.p

Glendale Water and Power CA 50 E* http://www.glendalewaterandpower.com/save_money/residential/sh_energy_saving_reba

Glendale Water and Power CA 60 E* http://www.glendalewaterandpower.com/save_money/residential/sh_energy_saving_reba

IID Energy CA 50 E* http://www.iid.com/Media/rewards_instruct_residential10_Eng.pdf

Modesto Irrigation District CA 50 E* http://www.mid.org/rebates/pkts/homeAppliance.pdf

Pacific Power CA 30 E* http://www.homeenergysavings.net/Downloads/CA_ApplianceForm2010a.pdf

Riverside Public Utilities CA 50 E* http://www.riversideca.gov/utilities/resi-energystar.asp 

Silicon Valley Power CA 50 E* http://www.siliconvalleypower.com/pdf/res_rebates_09.pdf

Turlock Irrigation District CA 50 E* http://www.tid.org/stellentdmz/groups/public/documents/tidweb_content/tidweb_energy_

Groton Utilities CT 60 E* http://www.grotonutilities.com/files/conservation_forms/Appliance_Rebate.pdf

Norwich Public Utilities CT 50 E* http://www.dsireusa.org/incentives/incentive.cfm?Incentive_Code=CT54F&re=0&ee=1

Gainesville Regional Utilities FL 150 E* http://www.gru.com/YourHome/Conservation/Energy/Rebates/her_conditioner.jsp

Sawnee EMC GA 25 E* http://www.sawnee.com/Energy/incentives.aspx

Access Energy Coop IA 50 E* http://www.accessenergycoop.com/Content/Residential/Rebates.aspx

Linn County REC IA 25 E* http://www.linncountyrec.com/cgi-script/csarticles/uploads/334/Energy%20Star%20App

MidAmerican Energy IA 25 E* http://www.midamericanenergy.com/ee/include/pdf/ia_res_equip_brochure.pdf

MidAmerican Energy IA 25 E* http://www.midamericanenergy.com/ee/include/pdf/ia_res_equip_brochure.pdf

MidAmerican Energy IA 25 E* http://www.midamericanenergy.com/ee/include/pdf/ia_res_equip_brochure.pdf

MidAmerican Energy IA 25 E* http://www.midamericanenergy.com/ee/include/pdf/ia_res_equip_brochure.pdf

Muscatine Power and Water IA 25 E* http://www.mpw.org/residential_rebates.aspx

Ameren Illinois Utilities IL 35 E* http://www.actonenergy.com/portals/0/forms/REBATE-FORM-AC.PDF

Munihelps MA 25 http://www.munihelps.org/2010%20rebate%20forms/MailinformAshburnham.pdf

Utility or Agency State

Rebate 

Amount Effic Website
17-A-22

2009$

Belmont Municipal Light Department MA 25 http://www.town.belmont.ma.us/public_documents/BelmontMA_LightNews/Announcem

Belmont Municipal Light Department MA 75 http://www.town.belmont.ma.us/public_documents/BelmontMA_LightNews/Announcem

Concord Municipal Light Plant MA 50 E* http://www.concordma.gov/Pages/ConcordMA_LightPlant/appliance

Mansfield Municipal Electric MA 50 E* http://www.mansfieldelectric.com/consumerforms/Appliance-Rebate-App.pdf

Marblehead Light Department MA 50 http://www.marbleheadelectric.com/9-6_Rebate_guide_for_MMLD.pdf

Reading Municipal Light MA 25 http://www.rmld.com/Pages/rmldma_residential/rebate.pdf

Shrewsbury Electric & Cable Operations MA 25 http://www.shrewsbury-ma.gov/egov/docs/1263402562_742065.pdf

Wakefield Municipal Gas & Light Department MA 50 E* http://www.wakefield.ma.us/Public_Documents/WakefieldMA_MGLD/WMGLDRebate

Allegheny Power MD 25 E* http://www.nxtbook.com/nxtbooks/garrisonhughes/empowermaryland2010/#/4

Baltimore Gas & Electric Company MD 50 E* http://conservation.bgesmartenergy.com/residential/lighting-appliances/appliance-rebates

Delmarva Power MD 50 E* http://www.delmarva.com/energy/conservation/appliance/default.aspx

PEPCO MD 25 E* http://homeenergysavings.pepco.com/dc/appliance-rebate

Alexandria Light and Power MN 15 http://www.alputilities.com/forms/Energy%20Star%20Rebate%20Brochure%202010.pdf

Anoka Municipal Utility MN 25 E* http://www.ci.anoka.mn.us/index.asp?Type=B_BASIC&SEC={03DDAD7B-EC66-4214

Austin Utilities MN 25 E* http://www.austinutilities.com/pages/residential_conserve_incentives.asp

City of North St. Paul Electric Utility MN 30 E* http://www.ci.north-saint-paul.mn.us/index.asp?Type=B_BASIC&SEC={F5C1E5FE-1A

Shakopee Public Utilities MN 25 E* http://www.shakopeeutilities.com/Residential_Rebate_Packet.pdf

Stearns Electric MN 35 E* https://www.stearnselectric.org/energystarres.htm 

Co-Mo Electric Cooperative MO 50 E* http://www.co-mo.coop/documents/HomeApplianceRebateApp_000.pdf

Intercounty Electric Cooperative MO 50 E* http://www.ieca.coop/PROGRAMS/REBATES/tabid/116/Default.aspx

White River Valley Electric Cooperative MO 50 E* http://whiteriver.org/RebateProgram.html 

Nebraska Public Power District NE 30 E* http://www.nppd.com/EnergyWise/ac_application.pdf 

New Hampshire Electric Coop NH 20 E* http://www.nhec.com/residential_energystar_appliances.php

Northern Utilities NH 20 E* http://services.unitil.com/nh/energy_efficiency.asp?t=204

PSNH NH 20 E* http://www.psnh.com/Residential/Efficiency/Appliance.asp

Unitil NH 20 E* http://services.unitil.com/nh/energy_efficiency.asp?t=204

Verdigris Valley Electric Cooperative OK 50 E* http://www.vvec.com/products_services/rebate_program.php

Allegheny Power PA 25 E* http://www.alleghenypower.com/EngConserv/PA/WattWatchers/RebateAC.asp

PPL Electric Utilities PA 25 E* http://www.rebate-zone.com/ppl/pdf/PEJ.pdf 

National Grid RI 20 E* https://www.powerofaction.com/rireaircleaner/ 

Utility or Agency State

Rebate 

Amount 

2009$ Effic Website

Austin Energy TX 50 E* http://www.austinenergy.com/Energy%20Efficiency/Programs/Rebates/Residential/Air%
17-A-23

Austin Energy TX 50 E* http://www.austinenergy.com/Energy%20Efficiency/Programs/Rebates/Residential/Air%

CPS Energy TX 50 E* http://www.cpsenergy.com/Residential/Rebates/Air_Conditioner_Rebates/index.asp

CPS Energy TX 100 E* http://www.cpsenergy.com/Residential/Rebates/Air_Conditioner_Rebates/index.asp

Garland Power TX 50 E* http://www.garlandpower-light.org/pdfs/2009-2010%20Window%20Unit%20Applicatio

Garland Power TX 100 E* http://www.garlandpower-light.org/pdfs/2009-2010%20Window%20Unit%20Applicatio

Guadalupe Valley Electric Cooperative TX 100 E* http://www.gvec.org/safety_con/Home%20Improvement.pdf

Rocky Mountain Power UT 30 E* http://www.homeenergysavings.net/Downloads/UT_ApplianceForm2010.pdf

Pacific Power WA 30 E* http://www.homeenergysavings.net/Downloads/WA_ApplianceForm2010.pdf

Barron Electric Cooperative WI 25 E* http://www.barronelectric.com/Appliance%20&%20Lighting%20Program.pdf

Eau Claire Energy Cooperative WI 25 E* http://www.ecec.com/programs/incentives

Average (2009$) $ 42.83 

Adjusted Average (2009$) $ 64.88 

E* = ENERGY STAR
17-A-24

17-A.6 FEDERAL AND STATE TAX CREDITS

This section summarizes the Federal and State tax credits available to consumers who 

purchase energy efficient appliances. This section also describes tax credits available to 

manufacturers who produce certain energy efficient appliances.

17-A.6.1 Federal Tax Credits for Consumers of Residential Appliances

EPACT 2005 included Federal tax credits for consumers who installed efficient air 

conditioners or heat pumps; gas or oil furnaces are; furnace fans; and/or gas, oil, or electric heat 

pump water heaters in new or existing homes.7,8 These tax credits were in effect in 2006 and 

2007, expired in 2008, and were reinstated for 2009–2010 by the American Recovery and 

Reinvestment Act (ARRA).9

 These tax credits did not apply to consumers who purchased energy 

efficient clothes dryers or room air conditioners. 

Although this tax credit did not include efficient clothes dryers or room air conditioners, 

in an effort to evaluate the potential impact of a Federal appliance tax credit program, DOE 

reviewed Internal Revenue Service (IRS) data on the numbers of taxpayers who claimed the tax 

credits during tax years 2006 and 2007. It estimated the percentage of taxpayers who filed Form 

5695, Residential Energy Credits.10 It also estimated the percentage of taxpayers with entries 

under Form 5695’s Line 3, Residential energy property costs, which included (3a) energyefficient building property (including water heaters), (3b) qualified natural gas, propane, or oil 

furnace or hot water boiler, and (3c) advanced main air circulating fan used in a natural gas, 

propane, or oil furnace. While none of these three items corresponds to clothes dryers or room 

air conditioners, DOE reasoned that the percentage of taxpayers with at least one entry under 

Line 3 could serve as a rough indication of the potential of taxpayer participation in a Federal tax 

credit program for an efficient appliance during the initial program years. It found that of all 

residential taxpayers filing tax returns in 2006 and 2007, 2.1 percent each year claimed at least 

one credit under Line 3. DOE further found that the percentages of those filing Form 5695 for 

any

 

qualifying energy property expenditure (which also included installation of efficient 

windows, doors and roofs) were 3.1 and 3.2 percent in 2006 and 2007 respectively. 

DOE also reviewed data from an earlier Federal energy conservation tax credit program 

in place in the 1980s. While this tax credit was available from 1979 through 1985, DOE located 

data for only the first three years of the program.

11,12 ,13

 For those three years -1979, 1980, and 

1981 - the percentages of taxpayers filing Form 5695 were 6.4 percent, 5.2 percent, and 4.9 

percent.. Given that the data from this earlier tax credit program were not disaggregated by type 

of energy property, this data series served only to indicate a possible trend of greater 

participation in the initial program year, followed by slightly smaller participation in subsequent 

years. However, DOE did not find detailed analysis of this program to indicate the possible 

reasons for such a trend. Also, this trend varies from the more stable trend shown in the EPAct 

2005 energy tax credit program data for its first two program years.
17-A-25

 As discussed in chapter 17, section 17.3.3, DOE analyzed the percentage of participation 

in consumer tax credit programs using its estimates of consumer participation in rebate programs 

that was based on benefit/cost data specific to each product class. Hence it was difficult to 

compare these detailed estimates to the more general data analysis described above from the 

existing Federal tax credit program, or to use the IRS data analysis in its consumer tax credit 

analysis.

17-A.6.2 Federal Tax Credits for Manufacturers

EPACT 2005 provided Federal Energy Efficient Appliance Credits to manufacturers that 

produced high-efficiency refrigerators, clothes washers, and dishwashers in 2006 and 2007.14

The Emergency Economic Stabilization Act of 200815 amended the credits and extended them 

through 2010. Manufacturers receive the credits for increasing their production of qualifying 

appliances relative to a two-year rolling baseline. Each manufacturer is limited to a certain 

amount for all credits. Manufacturers were eligible for Energy Efficient Appliance Credits for 

qualifying models of residential refrigerators, residential and commercial clothes washers, and 

residential dishwashers. The credits were available for models produced in 2008, 2009, and 

2010. The credit amounts and criteria applied to manufacturers who produce these appliances. 

The credit amounts were for each unit manufactured; however, the maximum credit that a 

manufacturer could receive for qualifying equipment was $75 million for 2008–2010, with the 

exception that the most efficient refrigerator (30 percent) models were not subject to the cap.16 

17-A.6.3 State Tax Credits

The States of Oregon and Montana have offered consumer tax credits for efficient 

appliances for several years, and the States of Indiana, Kentucky and Michigan began offering 

such credits in 2009. The Oregon Department of Energy (ODOE) has disaggregated data on 

taxpayer participation in credits for eligible products. (See the discussion in chapter 17, section

17.3.3, on tax credit data for refrigerators and clothes washers.) Montana’s Department of 

Revenue does not disaggregate participation data by appliance, although DOE reviewed 

Montana's overall participation trend that were congruent with its analysis of Oregon's clothes 

washer tax credits. DOE was unable to obtain state tax credit data from Indiana, Kentucky or 

Michigan. 

Oregon’s Residential Energy Tax Credit (RETC) was created in 1977. After the Oregon 

legislature expanded the RETC program in 1997 to include residential refrigerators, clothes 

washers, and dishwashers, participation in the program increased significantly. For standardsized refrigerators the program offers two levels of rebates for units between 12 and 30 ft.3 The 

required efficiency levels are 20 percent above Federal standard (ENERGY STAR) and 30 

percent above Federal standard (CEE Tier 3). The program subsequently added credits for highefficiency heat pump systems, air conditioners, and water heaters (2001); furnaces and boilers 

(2002); and duct/air sealing, fuel cells, heat recovery, and renewable energy equipment. For 

heating, ventilating, and air conditioning equipment; residential appliances; and water heaters, 

the credit is $0.40 per kilowatt saved in the first year, or 25 percent of the net purchase price, 

whichever is less. The credit limit for energy efficient appliances and heating and cooling 

systems is $1,000 per calendar year; excess credit may be carried forward for 5 years.17 
17-A-26

Montana has had an Energy Conservation Tax Credit for residential measures since 

1998.18 The tax credit covers various residential energy and water efficient products, including 

ENERGY STAR heating/cooling equipment, water heaters, low-flow showerheads and faucets, 

and light fixtures and controls. In 2002 the amount of the credit was increased from 5 percent of 

product costs (up to $150) to 25 percent (up to $500) per taxpayer. The credit can be used for 

products installed in new construction or remodeling projects. The tax credit covers only that 

part of the cost and materials that exceed established standards of construction. 

Beginning in 2009 Indiana offered a tax credit to individuals and small businesses for 

costs associated with purchasing ENERGY STAR-qualified central air conditioners, room air 

conditioners, furnaces, programmable thermostats, and water heaters. The credit may be claimed 

against state income tax, insurance premium tax, or financial institutions tax. The amount of the 

credit is 20 percent of the expenditure for qualified heating and cooling equipment, to a 

maximum of $100 per taxable year. The credit applies to expenditures made in 2009 and 2010; 

there is no carryover.19,20 

Beginning in 2009 Kentucky offered a 30 percent state income tax credit for taxpayers 

who install certain energy efficiency measures in their principal residence or residential rental 

property. The qualifying products include water heaters, heat pumps, central air conditioners, and 

advanced main air circulating fans. A product must meet the same energy efficiency guidelines

as specified for the Federal tax credit for that residential product. The tax credit may not exceed 

$250. The credit, which applies to products purchased in taxable years 2009–2015, may be 

carried forward for 1 year.21,22 

Beginning in 2009, certain Michigan low-income taxpayers became eligible for a tax 

credit for the purchase and installation of qualifying energy efficient home improvements. The 

definition of qualifying home improvements is limited to the following categories: insulation, 

water heaters, furnaces, windows, refrigerators, clothes washers, and dishwashers. All equipment 

must meet the EPA Energy Star efficiency criteria. The amount of the credit is 10% of the 

installed cost of each improvement, up to $75 for single filers and $150 for joint filers. A 

taxpayer may not make more than one claim under each equipment category during a single tax 

year. The credit only applies to equipment purchased in 2009 - 2011. If the amount of the credit 

exceeds a taxpayer's tax liability for a given year, the balance is refunded.23,24 
17-A-27

REFERENCES

1. Rufo, M. and F. Coito, California's Secret Energy Surplus: The Potential for Energy 

Efficiency, 2002. XENERGY Inc. Oakland, CA. Prepared for The Energy Foundation and 

the Hewlett Foundation. (Last accessed March, 2011.) 

<http://www.ef.org/documents/Secret_Surplus.pdf>

2. Hall, B. H. and B. Khan, Adoption of New Technology. Working Paper No. E03-330, 

2003. Department of Economics, University of California, Berkeley, CA. 

3. Lekvall. P and C. Wahlbin, "A Study of Some Assumptions Underlying Innovation 

Diffusion Functions". Swedish Journal of Economics, 1973 

4. Geroski, P. A., Models of Technology Diffusion. Research Policy, 2000. 29: pp. 603-625 

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