Homeowner Energy Tax Credits in the U.S.

energy taxHave you taken Homeowner Energy Tax Credits into consideration? If you are a U.S. citizen and want to upgrade your home to make use of renewable energy and/or improve energy efficiency, you may be eligible for tax credits to offset some of the costs. In the previous year, the federal government offered two credits: the non-business energy property credit and the residential energy efficiency property credit. While the first one was planned to expire after 2014, the second one is good through 2016.

Which equipment qualifies for the Residential Energy Efficiency Property Credit? In general, fuel-cell, geothermal, wind and solar technologies are included.

  1. Wind turbines for the residential use (generating up to 100 kW of electricity)
  2. Fuel cells that generate at least 0.5 kW of power for home, relying on a renewable resources.
  3. Geothermal heat pump which meets federal Energy Star guidelines.
  4. Solar panels which generate electricity used in the home.
  5. Water heaters that are solar-powered and used inside the home (hot tubs and swimming pools heaters don’t qualify).

In general, you should claim for the Residential Energy Efficiency Property Credit if you use geothermal, wind and solar equipment in your principal residence and/or your second home.

Nevertheless, when it comes to the fuel-cell equipment, it qualifies only if you install it in your principal residence. The credit you get is equal to 30% of the equipment cost plus installation. Basically, there’s no upper limit on the amount of the credit for geothermal, wind and solar equipment, while the maximum tax credit for the fuel cells is $1000 for each kW of power capacity (or $500 for 0.5 kW).

Not only will you lower your tax, but you will also do something both for your finances and the environment if you improve the energy efficiency of your principal home (and your second home). All in all, it’s a good idea to give it a thought.

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