New USA Tax Credits – Home Renewable Energy
New USA Tax Credits – Home Renewable Energy
From Mother Earth News
With federal tax credits that went into effect in January 2009, U.S. homeowners get money back if they purchase wind turbines or solar panels. Tax credits also apply to energy efficiency projects such as adding insulation to your home or buying energy-efficient windows. Over time these types of energy upgrades can save you a lot of money.
All home energy upgrades require spending money now to save money later through reduced energy bills. Some of these projects are big investments, costing thousands or even tens of thousands of dollars. Your best paybacks will always start with conservation. Once you have reduced your energy consumption as much as possible, then you should look at producing your own heat and electricity.
Your tax credits will depend on the details of your project. The tax credits cover 30 percent of the cost of energy efficiency improvements, up to a total of $1,500 and upto 30 percent of the cost of most new renewable energy systems. For example, the maximum tax credit for installing a wind turbine is $4,000.
For a more complete summary of the new energy incentives, this list of tax credits on the Energy Star Web site is a good place to start. It has more details, and even links to the tax forms you’ll need. But here’s a general idea of what’s included:
- You can get a total of $1,500 per taxpayer for making home improvements to increase energy efficiency. Conservation is always your first choice. Improvements that qualify include installing new windows, additional insulation, and more energy-efficient water heaters and furnaces.
- Home solar-electric systems qualify for tax credits, as do solar water heaters. Both qualify for 30 percent of the cost of the project. Solar water heating is capped at a $2,000 credit; solar-electric systems are not capped.
- Now more types of renewable energy systems qualify for tax credits, including wind turbines (up to $4,000). Tax credits are also available for home fuel cells (30 percent of system costs), geothermal heat pumps (up to $2,000), and biomass stoves, such as woodstoves or pellet stoves ($300).
- There’s a new tax credit for plug-in hybrids ($2,500 to $7,500) although it gets phased out as more models of these cars are sold. Also, an earlier tax credit for gasoline-electric hybrids is still in effect. Toyota and Honda vehicles no longer qualify because of the number of those models that have been sold, but tax credits are still available for Ford, GM and Nissan hybrid vehicles.
Before spending your money on any of these projects you’ll want to read all the fine print. Many of these projects have restrictions, for example, eligible replacement windows must be Energy Star rated.
Also remember you may qualify for additional state or local incentives. Find out more about what’s available by visiting the Database of State Incentives for Renewables and Efficiency.
If you don’t have the money to invest in energy improvements right now, there are lots of different ways to lower your energy bills including inexpensive and DIY options.
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