Government Accountability Office
http://www.gao.gov/products/GAO-12-318
…The nonbusiness energy property credit is one of a number of federal initiatives that seek to address concerns about U.S. reliance on foreign energy sources and the impact of carbon dioxide (CO2) emissions on the climate. Enacted as part of the Energy Policy Act of 2005, the nonbusiness energy property credit was intended to increase homeowners’ investment in energy conserving improvements by reducing their after-tax costs. The credit is calculated as a percentage of qualified spending on such improvements as insulation systems, exterior windows and metal roofs up to a maximum claimable credit. The maximum credit was set at $500 in 2006 and 2007, raised to $1,500 in 2009 and 2010, and lowered back to $500 in 2011.
This report compiles and expands upon information previously presented to Congress in response to congressional request, which asked us to examine factors relating to the nonbusiness energy property credit. To address the request, we (1) evaluated factors to consider in deciding whether the credit should be cost-based or performance-based; and (2) estimated how requiring that only spending above a minimum amount be eligible for the credit, or introducing a base amount for the 2009 credit may have affected measures such as the amount of credit claimed, the revenue cost to the federal government, and incentives for taxpayers to increase their spending on energy efficiency improvements.
We are not making new recommendations based on this review. This work is intended to assist Congress in considering different ways that the credit can be structured to achieve the stated goals of reducing CO2 emissions and minimizing U.S. reliance on foreign energy sources
