2009 Stimulus Package: Retrofit your Home for Big Tax Credits

If you’ve been thinking about spending some cash to make your home more energy-efficient, or to convert to a ‘green’ energy source, there has never been a better time.

Back in September at our Home Energy Efficiency Gathering, we learned about tax credits and rebates available at that time.  With both our state and federal governments increasing incentives to “go green,” these tax credits have been improved. [NOTE:  A tax credit is a direct subtraction from the tax owed, not a deduction from income, so it can really add up].

And don’t forget that your energy provider (Flathead Electric Co-op or Northwestern Energy) may also offer rebates.  Check with your energy provider for more information.

Federal Tax Credits

With the passage of the 2009 Economic Stimulus Package, and President Obama signing it into law, the federal tax credits have been significantly improved. (see below for Montana tax credits).  Here’s how it affects the green-minded home owner (Organic Consumers Association Newsletter (2/26/09)):

  1. Energy conservation credits:  Homeowners investing in energy-saving insulation, replacement windows, duct seals, or high-efficiency heating and cooling systems can receive a tax credit worth 30% of the upgrade cost (maximum credit value $1,500).  [The previous tax credit was 10% of the upgrade cost, with a maximum of $500 credit.] 
  2. Sustainable energy credits:  Installation of solar panels, geothermal heat pumps and windmills also qualify for a 30% tax credit.  For example, a $24,000 investment to solar-power a home would generate a federal tax credit worth $7,200.  [Previously the cap was $2,000 for geothermal and solar; $4,000 for wind.]  Add available state and utility credits to this and consumers will see significant discounts in these purchases.
  3. New hybrid cars and plug-in conversion kit credits: New hybrid cars now qualify for tax credits worth anywhere from $2,500 to $7,500 while plug-in conversion kits for old hybrids now generate tax credits worth 10% of the kits cost (maximum credit value: $4,000)

For questions about home energy conservation and renewable energy options, you can contact a contractor trained by the federal Home Performance with Energy Star program. 

Montana Tax Credits:

This information is from the Montana Department of Revenue Site (includes non-energy related credits also):


  • Alternative Energy System Credit  up to $500 credit for: 

–  Nonfossil form of energy generation system such as wind energy, solar energy, solid waste, and decomposed organic waste in your principal home.

– Low emission wood or biomass combustion device, such as a pellet or wood stove in your principal home.



  • Alternative Fuel Conversion Credit for up to $500 (vehicle weight < 10,000 lbs), or up to $1,000 (vehicle weight > 10,000 lbs), on “equipment and labor costs incurred to convert a motor vehicle licensed in Montana to operate on alternative fuel.”
  • Biodiesel Blending and Storage Credit for 15% of costs (with limits), on cost of investments in depreciable property for constructing or equipping a facility, or both, in Montana to be used for biodiesel or biolubricant production.
  • Energy Conservation Installation Credit for 25% of expenses up to $500 for single taxpayer or up to $1000 for a couple, on ”the installed cost of materials and equipment which reduce the waste or dissipation of energy, or reduce the amount of energy required to accomplish a given amount of work.”
  • Geothermal System Credit for up to $1500 on “installation cost including such cost, but not limited to, trenching, well drilling, casing, ground source pumps, ductwork, and design and labor.”
  • Oilseed Crushing Facility Credit for 15% of cost, up to $500,000 for “investments in qualifying depreciable property in Montana used to crush oilseed crops for the purpose of making biodiesel fuel or biolubricant.”


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