Currently, many tax incentives are available for energy efficient home improvement projects. You can qualify for several different incentives if you replace your old water heater with a qualifying new model. While water heaters aren't the most exciting renovation project, you may be surprised at the amount of energy savings provided by newer heaters, and the amount of cash you can receive through this tax credit.

Oil, Propane, and Gas Water Heaters
Currently, only tankless heaters in this category will qualify. You are eligible to receive up to $300 for this choice. They must meet the following criteria:

• Must have an energy factor of 0.8 (over 33% more efficient than current federal standards!)

• Must have Manufacturer's Certification Statement

Electric Water Heaters
You can receive up to $300 on these models. They must meet the following criteria.

• Must have an energy factor of 2.0 (over twice as efficient as the current federal standards!)

• Must have Manufacturer's Certification Statement

Solar Water Heaters
This credit can be a little trickier to qualify for. At least half of the energy generated by your property must be from solar power. You may claim solar water heater itself, not water heating system of the entire house. You can qualify for30% of the cost, up to $2000! The following criteria must be met:

• Must be certified by the Solar Rating and Certification Corporation (SRCC)

• Must not be a heater for a pool or hot tub

By Alicia Rowe