Renewable Energy Tax Credits & Benefits

Now more than ever, consumers are realizing that the use of renewable energy products in the home truly is the future. The primary reason is that the government offers a tax credit in return to buying and installing some products of sustainable energy. These will include energy efficient windows, insulation, roofs, cooling equipments, doors and heating. The clean energy solutions will help improve your home’s energy footprint, whether it is to cool down during the summer season or to distribute heat in the winter. You can receive as much as 30 percent of the overall cost of what you  spent on the home improvements.

Here is a short outline of the maximum allowable credits, the equipment requirements as well as other details that can vary depending on the technology you install.

Solar Electric Property

• 30% tax credit of qualified expenditures for solar electric systems that are put in service after the year 2008.
• No maximum credit will be given for the systems that are put in place after year 2008.
• The systems should be placed in service on or after the 1^st of January 2006 and on or before 31^st of December 2016.
• The home being served by the system need not be the principal residence of the taxpayers.

Solar Water Heating Property

• 30% tax credit on the cost of the system that are put in place after year 2008.
• The systems should be placed in service on or after 1^st of January 2006 and on or before 31^st of December 2016.
• The equipment needs to be certified for performance by the SRCC or Solar Rating Certification Corporation or any comparable entity being endorsed by the state government where the property has been installed.
• At least of the energy that is being used for heating the water of the dwelling should be from solar so that the expenditures of the property can be considered as eligible.
• The renewable energy tax breaks will not apply to the solar water heating property for hot tubs or swimming pools.
• The home being served by the system need not be the principal residence of the taxpayers.

Small Wind Energy Property

• No maximum credit will be given for the systems that are put in place after year 2008.
• The systems should be placed in service on or after 1^st of January 2006 and on or before 31^st of December 2016.
• The house being served by the system need not be the principal residence of the taxpayers.

Fuel Cell Property

• Maximum credit is $500 for every half kilowatt.
• The systems should be placed in service on or after 1^st of January 2006 and on or before 31^st of December 2016.
• The fuel cell must include a nameplate capacity of a minimum of 0.5 kW of electricity with the use of the electrochemical process and electricity-only generation efficiency more than 30%.
• For joint occupancy, maximum qualifying costs that must be considered by all the occupants to figure out credit is $1,667 for every 0.5 kW. It will not apply to the married couple a file a joint return. The credit which can be claimed by every person is proportional to the costs that he or she has paid.
• The house being served by the system need not be the principal residence of the taxpayers.

Geothermal Heat Pumps

• No maximum credit will be given for the systems that are put in place after year 2008.
• The systems should be placed in service on or after 1^st of January 2006 and on or before 31^st of December 2016.
• The house being served by the system need not be the principal residence of the taxpayers.
• The geothermal heat pump should meet the criteria of the federal Energy Star.

May of these tax credits expire at the end of 2016, but the long term benefits and cost savings still remain.   If you're looking to "get off the grid" just a little, help the environment and put some money back in your pocket, any of these renewable energy systems are a great investment.

For some other great ideas for improving the efficiency of your home, check out The Homeowner's Guide to Renewable Energy.

featured image photo credit: arcadiapower.com