Residential Energy Tax Credits Extended Through 2010
Residential Energy tax credits have been extended until December 31, 2010. Many of the caps, or limits on the tax credit amount you can claim, have been eliminated.
With the exception of a biomass stove, you may be able to take a credit of 30% of your costs of qualified solar electric property, solar water heating property, fuel cell property, small wind energy property, and geothermal heat pump property. This includes labor costs properly allocable to the onsite preparation, assembly, or original installation of the property and for piping or wiring to interconnect such property to the home.
Biomass Stove 30% of cost, up to $1,500*
Stove which burns biomass fuel to heat a home or heat water with a thermal efficiency rating of at least 75%.
Biomass fuel is defined as "Any plant-derived fuel available on a renewable or recurring basis, including agricultural crops (corn) and trees, wood and wood waste and residues (including wood pellets), plants (including aquatic plants), grasses, residues, and fibers."
*Subject to a $1,500 maximum per homeowner for all improvements combined (storm windows, doors, roofing, insulation, etc.)
Geothermal Heat Pump 30% of the cost - NOT subject to $1,500 cap
Frankly, $1,500 isn't much incentive to purchase a $40,000 system, but $12,000 (30%) is. Especially when you consider a geothermal heat pump will deliver as much as $5.50 in heating or cooling for every $1 spent on electricity.
Solar Water Heating 30% of cost, up to $2,000
At least half of the energy generated by the "qualifying property" must come from the sun. Homeowners may only claim spending on the solar water heating system property, not the entire water heating system of the household. The credit is not available for expenses for swimming pools or hot tubs. The water must be used in the dwelling.
The system must be certified by the Solar Rating and Certification Corporation (SRCC) and placed in service before December 31, 2016. The IRS defines "placed in service" as when the property (installed equipment) is ready and available for use.
Photovoltaic Systems 30% of cost - After January 1, 2009 the $2,000 cap no longer applies
Photovoltaic systems must provide electricity for the residence, and must meet applicable fire and electrical code requirements. Must be placed in service before December 31, 2016.
Photovoltaic systems (solar panels for electricity), at best, convert only 18% of the sun's rays to electricity. This relative inefficiency is why you need so many panels to put a noticeable dent in your electric bill. So until someone comes up with a 30% efficient solar panel, the 30% percent tax credit will put a sizeable dent in a typical $20,000 installation.
Radiant Hot Water Heating
Radiant heating isn't mentioned specifically on the tax credit schedule, but a solar water heater, as mentioned above, used for radiant home heating would qualify for the credit.
Residential Small Wind Energy Systems 30% of the cost - Not limited to $1,500 cap. Must be placed in service before December 31, 2016.
No matter what type of system you purchase, verify the tax credit with your accountant before signing a formal agreement with your energy contractor.
With the exception of a biomass stove, you may be able to take a credit of 30% of your costs of qualified solar electric property, solar water heating property, fuel cell property, small wind energy property, and geothermal heat pump property. This includes labor costs properly allocable to the onsite preparation, assembly, or original installation of the property and for piping or wiring to interconnect such property to the home.
Biomass Stove 30% of cost, up to $1,500*
Stove which burns biomass fuel to heat a home or heat water with a thermal efficiency rating of at least 75%.
Biomass fuel is defined as "Any plant-derived fuel available on a renewable or recurring basis, including agricultural crops (corn) and trees, wood and wood waste and residues (including wood pellets), plants (including aquatic plants), grasses, residues, and fibers."
*Subject to a $1,500 maximum per homeowner for all improvements combined (storm windows, doors, roofing, insulation, etc.)
Geothermal Heat Pump 30% of the cost - NOT subject to $1,500 cap
Frankly, $1,500 isn't much incentive to purchase a $40,000 system, but $12,000 (30%) is. Especially when you consider a geothermal heat pump will deliver as much as $5.50 in heating or cooling for every $1 spent on electricity.
Solar Water Heating 30% of cost, up to $2,000
At least half of the energy generated by the "qualifying property" must come from the sun. Homeowners may only claim spending on the solar water heating system property, not the entire water heating system of the household. The credit is not available for expenses for swimming pools or hot tubs. The water must be used in the dwelling.
The system must be certified by the Solar Rating and Certification Corporation (SRCC) and placed in service before December 31, 2016. The IRS defines "placed in service" as when the property (installed equipment) is ready and available for use.
Photovoltaic Systems 30% of cost - After January 1, 2009 the $2,000 cap no longer applies
Photovoltaic systems must provide electricity for the residence, and must meet applicable fire and electrical code requirements. Must be placed in service before December 31, 2016.
Photovoltaic systems (solar panels for electricity), at best, convert only 18% of the sun's rays to electricity. This relative inefficiency is why you need so many panels to put a noticeable dent in your electric bill. So until someone comes up with a 30% efficient solar panel, the 30% percent tax credit will put a sizeable dent in a typical $20,000 installation.
Radiant Hot Water Heating
Radiant heating isn't mentioned specifically on the tax credit schedule, but a solar water heater, as mentioned above, used for radiant home heating would qualify for the credit.
Residential Small Wind Energy Systems 30% of the cost - Not limited to $1,500 cap. Must be placed in service before December 31, 2016.
No matter what type of system you purchase, verify the tax credit with your accountant before signing a formal agreement with your energy contractor.
