Only very energy efficient equipment of each type would be eligible. The proposed tax credits reflect the considerations noted above. Eligible items embody new, cutting edge technologies, generally capturing less than 1 percent of market sales. Therefore, few of the credits would go for purchases that would have been made anyway. For example, compared to typical units on the market, the eligible advanced air conditioning systems and electric heat pumps are 40 percent more efficient, and eligible electric heat pump water heaters and natural gas heat pumps are about twice as efficient.
Eligible items are currently available.
Energy efficiency standards are available for the eligible equipment so that items could be defined precisely enough for IRS to administer the credit. Through 2008, we estimate that over 7 million taxpayers will purchase energy efficient equipment eligible for the credit. As noted above, eligible units are substantially more energy efficient than the typical units on the market. Almost one million new homes and manufactured homes are built and sold each year. Some states and certain Federal programs require new houses to meet Model Energy Code standards for insulation and related construction standards, and for heating, cooling and hot water equipment.