Tax Credits for Renewable Energy System Purchases

There has been a lot of speculation and misinterpretation related to the credits available for renewable energy systems. Time to set the record straight. Homes that integrate renewable energy systems are eligible for Residential Energy Efficient Property Credit , grid tied or off-grid.

The IRS does not distinguish the way that many state and local energy rebates are designed. This difference in the qualifiers has confused many people looking to move to remote properties without access to public utilities.

 Item 2 on the IRS website (link: http://www.irs.gov/uac/Get-Credit-for-Making-Your-Home-Energy-Efficient-or-Buying-Energy-Efficient-Products) states that the credit will apply to, “qualified residential alternative energy equipment, such as solar hot water heaters, solar electricity equipment and wind turbines installed…” on homes in the US. As with any tax credit, the applicant must be paying taxes in excess of the 30% that the IRS will return. However, this credit can be carried forward as well as backward if the taxpayer isn’t able to apply it all in the installation tax year.

This incentive to purchase alternative energy generation equipment runs through the end of 2016. In the past, there was a $2,000 credit limit, but the American Recovery and Reinvestment Act of 2009 Section 1603 (ARRA) removed the limit.

It is important to check to see if the products you are interested in qualify. A reputable electrical contractor can help you with that, or:

For more information about alternative energy, check out about-althernative-energy.com (Link: http://www.about-alternative-energy.com/Solar-Rebates.html ) This blog has a lot of detail about the qualifications required to receive the tax credit.

For information on specific state and area incentives, see the U.S. Department of Energy, Database of State Incentives for Renewables and Efficiency. http://www.dsireusa.org/incentives/index.cfm?EE=1&RE=1&SPV=0&ST=0&technology=all_solar&sh=1

So now you have the correct information there had never been a better time to make the move to live without the tether of public utilities. It’s 30% more affordable!

Note: ALWAYS consult your tax professional for current rules.