Cut Your Taxes Through Solar Panels
If you can find one person in the United States who wouldn’t say “YES” as loud as possible, I would be surprised. I started building solar panels because I could save on some electric and gas bills, but now the Federal Government is actually encouraging me to do it. I know, sounds crazy that the Feds would want to help ‘ole Sam out, but they do. Here’s a little information just so you don’t think I’m making this up.
About Tax Credits
A tax credit is generally more valuable than an equivalent tax deduction because a tax credit reduces tax dollar-for-dollar, while a deduction only removes a percentage of the tax that is owed. Consumers can itemize purchases on their federal income tax form, which will lower the total amount of tax they owe the government. Fuel-efficient vehicles and energy-efficient appliances and products provide many benefits such as better gas mileage –meaning lower gasoline costs, fewer emissions, lower energy bills, increased indoor comfort, and reduced air pollution. In addition to federal tax incentives, some consumers will also be eligible for utility or state rebates, as well as state tax incentives for energy-efficient homes, vehicles and equipment. Each state’s energy office web site may have more information on specific state tax information.
Emergency Economic Stabilization Act of 2008
On October 3, 2008, the House of Representatives passed the Emergency Economic Stabilization Act (EESA) of 2008, which includes an 8-year extension of the solar investment tax credit (ITC) and provides other critical incentives to the renewable energy marketplace. Effective January 1, 2009, the EESA was signed into law by President Bush 3 hours after House passage, finally breathing life into what was thought to have been a lost cause as the ITC was about to expire. But not only does this new law extend the ITC, it also provides additional provisions that will combine for $18 billion in renewable energy tax credits. Those provisions include credits for solar, wind, and several other clean-energy industries in the United States.
The EESA removes the $2000 limit on the tax credit for residential systems. Now, both commercial and residential photovoltaic systems will be eligible for a 30% tax credit. The new law also contains a suspension of utility exemptions so that electric utility companys can also benifit from the ITC.
“By passing this bill,” according to Suntech America president Roger Efird, “Congress has finally given the solar energy industry the ‘policy certainty’ that will attract investment, expand manufacturing and lower the cost of solar energy to consumers,” Efird said in a statement.
The solar industry is the greatest beneficiary of this legislation. The tax credits for solar initiatives are good for the next 8 years. Additionally, the $2,000 tax credit limit for residential solar systems being lifted means that homeowners can get a 30% tax credit on the solar panels they install starting next year (That’s 2009!).
So if my math is right for every $100 you spend on solar power, the IRS will give you $30 back on your taxes. Doesn’t get much better than that. Don’t delay any longer, get out there and start building.
Sam Hawkins
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Does anyone know if you build your own solar panels but have to obviously purchase the materials to do so, including the solar cells, if this qualifies for the tax credit?
I’m pretty sure that that will qualify too. The government is pushing renewable energy. I don’t think it would matter how you get the renewable energy.
This is so awesome that they are finally doing this! I hope this inspires more people to go with renewable energy at home.
This is a great advantage to the average homeowner. The government did this same thing 20 years ago or so. At that time I took advantage and the result was $2500 I believe it was that the tax credit amounted too. The tax credit actually paid for the system as I was able to do it with a contractor buddy and got a discount on all the stuff we needed.
You’re crazy if you don’t do it and you can afford the cost upfront.
fredo
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