An Evaluation of Tax Credits for Residential Energy Efficiency
17 Pages Posted: 27 Nov 2015
Date Written: January 2016
This paper evaluates tax credits for residential energy efficiency enacted by the Energy Policy Act of 2005, using taxpayer microdata and state-level data on electricity costs, climate, and other factors that might affect demand for energy efficiency. Tax credits for residential energy efficiency are found to be vertically inequitable. Taxpayers that live in states with colder winters are more likely to claim tax credits for residential energy efficiency, while taxpayers in states with higher electricity costs claim higher tax credit amounts (in dollar terms).
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