Section 206 of the Energy Policy Act of 2005 (EPACT 2005) provides for the establishment of a rebate program for expenditures made to install renewable energy systems in connection with a dwelling unit or small business. The amount of the rebate is 25 percent of the expenditures for qualifying equipment made by the consumer or $3,000, whichever is less. An analysis of the impact conducted by the Energy Information Administration (EIA) indicates the following results:

• Section 206 rebates would increase 2006 renewable residential energy consumption between 1 and 3 trillion British thermal units (Btu) above EIA Reference Case levels. By 2010, the estimated increase ranges from 7 to 14 trillion Btu. By comparison, EIA estimates total delivered residential energy consumption in its Annual Energy Outlook 2006 Reference Case to be about 12 thousand trillion Btu from 2006 through 2010.


• Geothermal heat pumps (GHPs) account for the largest share of the increase. Annual sales in 2006 are expected to increase between two- and five-fold over Reference Case levels due to Section 206 rebates. By 2010, GHP annual sales are projected at three to four times Reference Case levels.


• Residential wood stoves are estimated to be a distant second to GHPs in providing additional renewable energy as a result of the Section 206 rebate program. Solar technologies provide only minimal additional energy. Residential wind turbines, geothermal direct use, and other forms of biomass (notably pellet fuel stoves) are not examined due to insufficient data.