Renewable Energy and Energy Efficiency Tax Credits

With so much attention being given to the new first time home buyer tax credit, some potentially lucrative tax incentives for home improvements have been overlooked. There are some new tax incentives as well as some expansions given to the current tax credits for home improvements relating to energy efficiency and renewable energy additions like solar panels. Now I am NOT an accountant or tax professional. When it comes to your taxes, I recommend you seek the advice of an accredited tax professional. Hopefully the IRS will issue some firm guidelines on the details of these credits soon as there are bound to be a lot of questions regarding qualification.

Here are the new tax credits in a nutshell. There is a tax credit of up to $1,500 for installing qualifying windows, doors, water heaters, roofs, insulation, heating and cooling equipment (HVAC, qualifying wood and pellet stoves) to your home in 2009 and 2010. On the renewable energy side, the tax credit is 30% of the qualifying solar technology, geothermal and wind energy systems with no limit through 2016. So if you install some solar panels and a wind power generator, you will receive a 30% tax credit which lowers your tax bill dollar for dollar for the cost of the upgrade.

 

Notably the big increase is in the energy-efficiency tax credit, which went from 10% of the qualifying costs to 30% and the cap also goes up from $500 originally to $1,500 (that’s a total credit for all applicable improvements combined in 2009 and 2010). The credit also includes stoves that use renewable biomass fuel. Another big change with the 30% renewable energy credit is the removal of the cap on claims   for systems (except for fuel cells) installed after 2008.

Under the prior guidelines the cap was $2,000 for a solar system. Now you can take 30% of the qualifying cost instead.

If you live in an older home, these tax credits are targeted at you. Just replacing your older single pane windows with new dual pane, low e vinyl  replacements will have a significant impact on your utility bills. Not only will you save money, but living in your home will be more comfortable year round. Before making any decisions, I recommend you consult with your tax professional to maximize your tax benefits. Check out the web for more information about renewable energy sources and the differences between them.
Source: Wall Street Journal

Comments

I hope that people really do

I hope that people really do take advantage of these tax breaks. Becoming green not only is good for the environment, but it will save you some "green" too. There are a lot of things that you can do from home to make sure you are more environmentally friendly. Simply by just checking and replacing your filters regularly you can help your air conditioner run more efficiently. There are a lot of things that you can do to save money. Hopefully people will take advantage of these and help the environment!

All of these energy efficiency

All of these energy efficiency tax credits need to be extended as long as possible regardless of the loss tax revenue to the government the economical impact has to much greater in the positive way.

yes!

Write it off baby!

Yes I definitely agree with

Yes I definitely agree with my friend on what he has mentioned above. "every little bit helps" this is completely true and everyone shall agree on that fact. Cause when it comes to gathering all the actual materials used in the energy- efficient remodel. The wires, ply woods, plumbing and almost all the other minor tasks that are to be completed shall be finished perfectly, so that it won't have any troubles after the mass building has been created.

be careful

You should have a home energy auditor review your home before making a large investment like solar panel. That way you could minimize the amount of solar panels needed with easy fixes like adding missing insulation (insulation is also included in the Tax Credit).

Solar Credit Awesome

I think its great that they are offing this type of tax credit. It makes complete sense, all of these energy efficiency tax credits need to be extended as long as possible. The benefits are to great. I also think that regardless of the loss tax revenue to the government the economical impact has to much greater in the positive way

great

It's great to hear about all these energy efficiency projects. I would love to know more about these projects as I know that many people will greatly benefit from it. Hope they could come up with something good.

Credit for Solar

I think this as awesome for promoting renewable energy and living a green lifestyle, the tax credits are a great move to cut down on some of these expenses. However, using things like portable solar chargers or solar cell phone chargers can be used to replace wall outlets, do you know if this counts as well?

Energy efficient homes

Its about time the credits were increased. Some cities have also added their own incentives usually in partnership with the local energy company. From an investment standpoint its a good long term investment too since energy costs are only going to go up. Of course, this credit is targeted at older homes, most of the new homes are already energy efficient (or should be).

Window Tinting

I would only install insulation products that certifiably qualify for the tax credit. I own a window tinting business and only certain films qualify for the tax credit. With home improvements, the safest way to not get into trouble with the IRS is to have the vendor provide you with an affidavit of certification that product qualifies under the American Recovery and Reinvestment Tax Act of 2009 (ARRA).

Window tinting is a project that enables you to take advantage of the tax credit, without an extensive remodel or other costly projects. Typically tinting a whole house will save about 30% on your cooling bill, as well as stopping the interior of your home from fading. Typical ROI on residential applications is between 2-3 years, with help of the tax credit. After payback the film is like a "Piggy Bank" in your windows.

Incidentally Solar screens are also a good insulation product (which I perform also), however, as there are no billion Dollar screen fabricators (as in the solar film industry) there is no official certification.

You probably ought to be able to claim for a solar screen project, however it is a somewhat grey area and file your taxes with solar screens at your peril.

So I heard about all the tax

So I heard about all the tax incentive programs. You would say that this is the right moment to start a remodeling project. I have a great interest in renewable energy, I am aware that this would mean long time savings but I haven't come with a project yet, I am relying on Las Vegas remodeling, they know better what are my real options.

It would behoove readers to

It would behoove readers to also check out any local utility provider programs or state credit programs as well. The City of Austin has a great Green Building Program through Austin Energy. Perdernales Electric Coop also offers some. As an EcoBroker I love these and like to help people with them. Most Forex traders loose money, don't be one of them! Learn Forex for free here and get useful recommendation on Forex learning resources.learn forexLearning to trade the Forex market effectively requires the right ... Learn at your own pace. Sign up for one of our comprehensive online training courses.

Federal Tax Credits Save Money

It would behoove readers to also check out any local utility provider programs or state credit programs as well. The City of Austin has a great Green Building Program through Austin Energy. Perdernales Electric Coop also offers some. As an EcoBroker I love these and like to help people with them.

I agree that learning about

I agree that learning about these tax credits can make a big difference - but definitely need to talk to a tax professional to see if they are really in your best interest. It's definitely good news though for first time home buyers getting fixer uppers :)

Best Interests

I agree. You should always talk to a tax expert. These improvements will ulitimately pay for themselves over the long run. So if you can also save some money on your taxes, why not? :)

Boomers & Seniors Blog Carnival

Hi, Thanks for an interesting article and for joining us at the newest Boomers & Seniors Blog Carnival at SandwichINK - http://tinyurl.com/cudrpu . I had no clue about these great deals, so will definitely be saving this as a good resource.

Here In Utah Some great Energy incentives

Same thing here in Salt Lake City, UTAH. Because of our cold winters the gas companies have agreed to reimburse residents if they upgrade their insulation.. Wonderful improves the home, and saves you money on your gas bill.. Lots of incentives out there, you just need to capitalize on them...

What can I write off?

How do I find out what changes can be done to ones home that will qualify for a tax credit in the new stimulus package? I have installed solar screens on my home to make it more energy efficient. They do not create solar power but, block the amount of heat that comes into my home thus allowing me to run my A/C less since my home is now a noticably cooler temperature. So does my Solar Screen investment qualify for the tax credit since I am making my home more energy efficient?

solar screens

I have the same question as Shane(above) about tax credits for solar screens. Did he ever get an answer? I would like to know also. S

a lot can be written off

As far as my experience has gone, it's been all the actual materials used in the energy-efficient remodel. I haven't written off the labor, maybe someone can tell me if that's okay. We did one of those Solatubes and deducted only the cost of the actual tube. Every little bit helps!

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