This is exciting news for anyone in Maryland interested in energy efficient home improvements. This article was written by H. JOSEF HEBERT. Note the highlighted paragraph below.

WHO GETS WHAT: Tax breaks for energy conservation

WASHINGTON (AP) — Looking to buy a new furnace or air conditioner or replace drafty windows? Congress may soon give you a break that could save you hundreds of dollars.

There’s also money to install solar panels for the water heater, or add insulation to the attic — maybe even put up a small windmill.

The $900 billion economic recovery package before Congress includes more than $50 billion in energy-related grants, tax breaks and loan guarantees to spur solar and wind energy development and to cut energy use in everything from government buildings to schools and homes.

“This far outstrips any previous federal funding for such programs,” says Kateri Callahan, president for the Alliance to Save Energy, an energy conservation advocacy group.

While the recovery package is touted as a stimulus to create thousands of “green energy” jobs, the average homeowner could be among those who will reap major benefits.

Both the House-passed stimulus package and the Senate version include $4.3 billion in tax breaks for residential energy-efficiency improvements including the purchase of more-efficient furnaces, heat pumps and air conditioners as well as for energy-tight windows and more insulation.

There’s another $300 million to go to states as matching grants to promote utility-sponsored rebates for the purchase of more energy-efficient appliances, and tax breaks for people wanting to install solar panels to power water heaters.

On Thursday, President Barack Obama directed the Energy Department to end long-standing delays in more stringent energy efficiency standards for an array of consumer products, including dishwashers, lamps, ranges and ovens, demanding they be issued by August.

“This will save consumers money. This will spur innovation,” Obama said.

Unlike past efforts by Congress to use taxes to spur energy efficiency, the proposals in the stimulus package are substantial: A credit of 30 percent of the cost of the equipment with a maximum for a household of $1,500, triple what Congress enacted four years ago.

The improvements must meet a minimum efficiency standard, generally 15 percent to 20 percent higher than the base standard. But that kind of equipment could cost $1,500 to $2,000 more than models that would not qualify, with the total price tag of a unit coming easily to more than $5,000.

Will people invest in these improvements in today’s dire and jittery economic times, tax break or not?

“People are still going to have to come up with the other two-thirds” of the cost, says Lowell Unger, policy director of the Alliance to Save Energy. But he says the credit could pay for the energy-efficiency improvement. “If the furnace goes out, hopefully they’ll replace it with a good one.”

“It will get some people to buy,” says Steve Nadel of the American Council for an Energy Efficient Economy. “Other people just aren’t going to be able to come up with the money.”

The 30 percent tax credit also could be used by people looking at solar energy — or even a small wind turbine — to provide power for their homes. The stimulus bills would remove the current $2,000 (solar) and $4,000 (wind) caps on the tax credit.

And that could help businessmen like Jeffery Wolfe, founder and chairman of GroSolar, a distributor and installer of solar panels, based in White River Junction, Vt.

Wolfe would benefit from more residential business, but he’s more interested in several provisions in the stimulus package that would help him get access to cash in these times of tight credit so he can continue to expand his business and hire more people quickly.

“We’ve been growing fast, but it’s been difficult to get lines of credit. It’s hard to grow when the economy is in such turmoil,” Wolfe said in an interview.