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How Utilizing the Sun and Wind at Home Can Save You MoneyJuly 3rd, 2015 by
Though many homeowners are hesitant to take advantage of the benefits of green technology due to how expensive it can be to install, few are aware that using alternative energy sources at home can earn them quite a bit of that expense back in tax credits. To find out how you can benefit from the Residential Renewable Energy Tax Credit, read on.
What Is the Residential Renewable Energy Tax Credit?
The Residential Renewable Energy Tax Credit refunds homeowners up to 30 percent of the total expense of installing green technology at their current home. These expenses include the amount the homeowner spends on the system, its installation, and any on-site work required to connect the new equipment. The equipment doesn’t need to be installed in your main residence to qualify for the tax credit, and if the credit you receive exceeds the taxes you owe, the unused credit may be carried forward and used on the following year’s tax return.
Does Your Green System Qualify?
Solar-electric properties do not have a maximum credit limit.
Solar water-heating properties also have no maximum credit, but they must be certified by the Solar Rating Certification Corporation or a similar state-sanctioned organization and must account for at least half of the home’s total water heating power. In addition, this credit won’t apply if solar heating is only used for pools or baths.
Fuel cell properties have a maximum credit of $500 per half kilowatt. The fuel cell must be installed in your principal home and must generate 30 percent or more of the home’s electricity to qualify for the tax credit.
Small wind-energy properties have no maximum credit limit.
Geothermal heat pumps do not have a maximum credit, but they must meet ENERGY STAR standards.
To receive the Residential Renewable Energy Tax Credit, homeowners need to have green systems installed by December of 2016. If you’re currently using a system that qualifies for the tax credit, or if you’re planning to have one installed before then, make sure to apply in time to take advantage of the credit your system could earn you.
Sources: ENERGY STAR; Internal Revenue Service; NC State University; US Department of Energy.