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10 things you need to know about energy tax credits and going green

February 10th, 2010 · 2 Comments

Energy tax credits provide strong incentives to go green, weatherize your home and install clean renewable energy sources like wind and solar power.

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Only two things are certain in life and neither one is an ideal topic for a blog post. But April is just around the corner, and now would be a good time as any to talk about taxes, particularly, your energy tax credits.

Allison Casey of the DOE’s National Renewable Energy Laboratory has written an excellent article – part 1 here and part 2 here – over at the Energy Savers Blog, on the Things to Know Before You Claim Your Energy Tax Credit.

To summarize, here are the things Ms. Casey says you’ll need to know:

1. The forms to use for filing.
2. Maximum credits allowed.
3. Which credits can be carried over to future years
4. When installation costs can be included
5. How to handle state and local incentives
6. If you are eligible to receive tax credits
7. When your product was “placed in service.”
8. Whether your renovation, existing home, or new home qualifies for the credit
9. How to calculate the credits for spouses or joint home owners
10.If you own multiple properties, know which of them qualify for credits

Consult your accountant or the IRS

This is a detailed and informative resource, so if you handle your own filing, I strongly suggest you read the article. These are general information items, however, and the author cautions, that you should consult your accountant or contact the IRS, if you have questions that are highly specific to your own tax situation.

The ultimate caveat: “If you do not pay taxes, you cannot get the tax credit.” It may seem funny, but I guess it needed to be said, the obvious might not be that obvious to some people.

Watch: Solar Energy Basics for your home .

Incentives to go green

What’s glaringly apparent in the article is this: the feds are giving us all the incentives to weatherize and to go green with solar or wind energy.

Don’t believe me? Consider the maximum tax credits allowed (item 3), for instance. You can actually get 30% tax credit without the $1,500 ceiling up until 2016, for purchases related to geothermal heat pumps, solar energy systems (including solar water heaters), wind energy systems.

Plus you get credit for installation costs of weatherization and renewable energy items like:

* Biomass stoves
* Central air conditioners
* Air-source heat pumps
* Furnaces and boilers
* Advanced main-air circulating fans
* Water heaters
* Geothermal heat pumps
* Solar energy systems (including solar water heaters)
* Wind energy systems
* Fuel cells

The point is, if you’ve been fence-sitting on weatherizing your home or installing clean energy sources, these energy tax credits are reasons enough to go green.

You don’t need to be a believer in global warming to take advantage of these incentives. Weatherization promotes energy efficiency. Renewable energy installations like wind turbines and solar panels can cut down your reliance on the grid. Both would translate to huge real dollar savings for your household in many years to come, plus a weatherized home with renewable energy fixtures would naturally have a higher market value than non-green homes.

Photo: Energy Savers Blog

Tags: Renewable Energy

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