|Renewable Energy Tax Credits Worth Up To $12,000|
Alt Dot Energy
October 9, 2008
When Congress passed the financial bailout bill, it included a range of federal
tax credits for a suite of new and renewed tax credits for individuals who want
to make energy efficiency and renewable energy improvements to their home or cars.
The tax bill should keep the solar and wind power industries competitive, and
that means they should continue to innovate, producing more power at ever more
There are several important provisions ordinary homeowners can take advantage of:
$500 Home Tax Credits For Energy Efficiency
You can claim a home tax credit for energy efficiency improvements made in 2009
(but not for improvements made in 2008) if you installed new insulation,
energy-efficient windows or an energy-efficient furnace, boiler or air conditioner.
A tax credit of up to $500 that expired in 2007 has been renewed for 2009. It
covers up to 10% of the cost of a range of projects that meet certain
specifications. Do $5,000 worth of qualifying work, and you not only get a $500
rebate, but also savings on energy bills for years to come.
Also note these important limits, which cap the amount of home tax credits you
can claim for any particular project:
Exterior doors, roofing or insulation: $500
Most heating, ventilation and air-conditioning improvements: $300
Furnaces or hot water heaters: $150
Remember, your overall tax credit is capped at $500, so if you install $5,000
worth of exterior doors and $2,000 worth of new windows, for a total of $7,000,
you can still only claim $500 — even though 10% of all qualifying work equals
$700. Also, the tax credit applies only to equipment, not labor.
Find more information about these home energy efficiency tax credits at the
Alliance to Save Energy or Energy Star or Department of Energy Websites. Note
that much of this information reflects the tax incentives in place in 2006 and
2007; for the most part, the 2009 tax credits are identical, but check updated
criteria for which products qualify, for instance.
$2,000 Home Energy Tax Credits for Geothermal
The new tax breaks include a new incentive to install ground-source heat pumps,
according to Ronnie Kweller, spokeswoman for the Alliance to Save Energy.
The old credits had been capped at $300 and were included under the overall
energy efficiency improvement cap of $500. No longer. Now you can claim up to
$2,000 of the cost of installing a geothermal heating and cooling system, and
the cost is separated completely from other energy-efficiency improvements you
might claim. Like the energy-efficient tax breaks, however, this incentives
doesn’t apply to work done in 2008.
Ground-source heat pumps are installed underground and use the constant
50-degree subsurface temperature to cool air or water in the summer, and heat it
in the winter — both of which reduce the cost of heating or cooling year round.
$2,000 Home Energy Tax Credits for Photovoltaic Solar Power
The bill extends for another eight years a tax credit that covers 30% of the
cost of new photovoltaic solar power systems on homes.
The existing tax credit, which was capped at $2,000, would have expired at the
end of 2008. Now, it’s good through 2016 — and there’s no longer dollar cap on
the 30% rebate.
$500 Home Energy Tax Credits for Fuel Cells or Microturbines
The tax incentive that had covered 30% of the cost of fuel cell or microturbine
systems in homes, which lapsed in 2008, has been restored for 2009 and through
2016. It covers up to $500 per 0.5 kw of capacity.
$7,500 Energy Tax Credits for Plug-in Hybrid Cars
The first 250,000 buyers of plug-in hybrid vehicles now qualify for a $7,500 tax
A similar tax credit for hybrid vehicles had been capped at $3,500.
Wildcard: State Energy Tax Credits
Keep your eyes out for new incentives from your state, since the bill also
authorizes an $800 million government bond program that encourages states to
create incentives for new and existing energy conservation and related programs.
Some of that money is likely to be used toward state tax breaks and other
incentives that will vary by location.