WASHINGTON, Feb. 18 - Expanded tax credits for energy-efficient home improvements in the new economic stimulus package puts more money in consumers' pockets by providing financial incentive for home owners to go green on their renovation projects in 2009 and 2010. While more efficient homes save on water and energy bills, these tax credits will make such home upgrades even more affordable.

The Internal Revenue Code section 25C tax credit for existing homes, which had expired at the end of 2007, was reinstated as part of the economic rescue package passed by the Bush Administration last fall. Homeowners could be rewarded for installing energy-efficient windows, doors, roofing and insulation as well as furnaces, air conditioners and heat pumps.

But remodelers found that the terms of the 25C credit -- equal to only 10 percent of the cost of each product and with a lifetime cap of $500 -- weren't strong enough to push enough home owners off the fence and into action.

Now, the credit rate and lifetime cap have been tripled - to 30 percent and $1,500, respectively - the list of eligible improvements expanded, and the deadline for applying has been extended through the end of 2010. Congressional estimates indicate that the new rules for the tax incentive will increase aggregate remodeling activity by more than $6 billion.

"The new tax credit also aligns with industry research indicating that even the most aggressive efficiency goals for new homes won't make a dent in overall energy consumption. Instead, remodeling and retrofitting the nation's older homes is by far the more efficient solution," said NAHB Remodelers Chairman Greg Miedema, CGR, CGB, CAPS, a remodeler from Tucson, Ariz.