Taking Advantage of the Residential Renewable Energy Tax Credit
In fact you may be able to receive a tax credit of up to 30 per cent based on alternative energy systems that are installed and running in your home. The credit is available up to December 31, 2016.
According to the U.S. Department of Energy, the credit may apply to a system that serves “a dwelling unit located in the United States that is owned and used as a residence by the taxpayer.”
The American Recovery and Reinvestment Act of 2009 extended many consumer tax incentives originally introduced in the Energy Policy Act of 2005 (EPACT) and amended in the Emergency Economic Stabilization Act of 2008.
The tax credit will apply to qualified expenditures for labor costs for on-site preparation, assembly or original system installation and for piping or wiring. So what types of renewable energy systems are considered for this tax credit?
- Solar electric systems: If you have the space to install solar panels to generate electricity, this may be the time to consider your options and see what is available for your property size and electricity needs.
- Solar water heating systems: Using the sun’s rays to heat your water is a great way of saving on your fuel bill. The suns rays are an effective heat source, and best of all they’re free.
- Geothermal heat pumps: Using the earth to create heat is an old yet very effective method of heating water. Geothermal heat pumps can be a great investment and provide a constant renewable source of energy using the earth’s natural heating properties.
- Wind turbines: Small residential wind turbines may be eligible for this energy tax credit, although there are restrictions on size and power output.
Starting your own small ‘power company’ to service the needs of your home is now more affordable and practical than ever. The available energy tax credits can help to reduce your initial investment costs and assist you in your efforts towards future energy savings.
Of course you should do your research before beginning any project to make sure your plans fall within the guidelines. When you’re ready to start, contact a certified RESNET contractor in your area who can help you and has the experience and know-how to make sure your project is completed properly and within the guidelines. This way, your energy system will function efficiently to provide you with maximum results and you will be able to take advantage of any energy tax credits you may be eligible to claim.