Renewable Energy – Tax Credits Make It Affordable

13
April

As part of the tax laws, the government offers tax credits for home owners who make improvements to their home that are energy efficient. The tax credits are available for home improvements and appliances that are energy efficient. The money saved in taxes help offset the cost of the improvements.

If the homeowners install a solar hot water heater that is on the list of energy efficient heaters, they can claim thirty percent of the cost off of their taxes at the end of the year. When homeowners add the thirty percent tax credit and the amount of money the new solar hot water heater saves them each year, it adds up to a reasonable amount. The savings make the initial cost a better investment. There is no monetary cap on how much credit homeowner can take.

They also offer a thirty percent credit for the purchase of a qualifying wind energy production on a small scale. For example, a home that uses one small windmill to generate energy for the home and any out buildings on the property would qualify. It is also a federal law that the energy companies must purchase any excess energy that the homeowner produces. At the end of the year, the homeowner has had no electric bill all year. In addition, the homeowner may have made money selling excess power. Also, they would have received a thirty percent tax credit. These savings help repay the owner for the cost of purchasing and installing the wind system. Again, there is no cap on the amount of credit the homeowner can take. However, the credit can only be taken once, in the year the system was purchased.

Geothermal heat pumps are another favored product that qualifies for the tax credit. These systems provide household heat and hot water to the home. The homeowners have a minimal heating bill each year. They only need enough electricity to run the blower on the device. Most homeowners are reporting being able to cut their electricity bill up to seventy five percent, or more, than using a regular furnace. If the family used gas or oil, those bills are totally eliminated. This method also carries no cap on how much money the homeowner can spend. Regardless of the installation and purchase price the homeowner can take thirty percent credit off their taxes the year of purchase.

An ambitious homeowner with the money to put in multiple projects could significantly reduce or eliminate electricity, heat and air conditioning cost by installing a wind system in conjunction with a geothermal system. While the initial outlay of cash is a consideration, the homeowner will reduce their taxes this year by thirty percent per the same calendar year. Right there the homeowner has recouped thirty percent of their investment. They have also decreased their monthly operating costs, and it increases the desirability and price of the home.

There are also other ways to benefit from tax credits. Purchasing energy efficient appliances will provide the homeowner with some of the same benefits just on a smaller scale. There is a fifteen hundred dollar tax credit for installing energy efficient windows, roofs, doors, and heating / cooling systems. Unlike the renewable energy systems, these products are limited to claiming thirty percent of the purchase, and installation price up to a maximum of fifteen hundred dollars.

When purchasing a home, or redoing a home, these tax credits are substantial enough to make homeowners consider using one or more of these systems or appliances. The tax credits alone will not pay for any of these energy efficient options. The homeowner has to weigh the cost of purchase and installation against the benefits. Benefits include tax credit, operating cost savings, increased value to the home, increased desirability of the home and the homeowners desire to help save energy. Only when all of these things are compared can the homeowner decide which, if any or all of the ideas are suitable for them.

This post was written by

jasonjason – who has written posts on Home Tips Plus.
I'm a father of three, married and a home owner since 2006. I've worked in fixing up homes and rental properties.

Email  • Google + • Twitter

Comments are closed.