Exploring Federal Tax Credits and Goverment Rebates on Renewable Energy Sources

Learning about Federal Tax Credits enables you to make sound economic decisions about investing in renewable energy sources such as solar panels or micro turbines.

Federal Tax Credits could be used if you have installed energy-efficient product or system in your home and part of your energy supply in your home comes from these alternative energy sources. This government rebates is offered by the United States Environmental Protection Agency/U.S. Department of Energy program. So what renewable energy technologies or products qualify for the government rebates? The question is linked to the various phases or schedules that the government has put together for this program.

Phase I of this program was over in December 2010

Here are some details:

1) The phase allowed anyone to claim a tax credit of 30% of the cost of the eligible products up to $1,500.00.

2) The installations must have been done at your existing primary residence. This means that new homes or rental properties did not quality for this government rebates program.

The approved products that qualified under this phase were included to encourage the energy efficiency in your residential property. So, they are not necessarily renewable energy technologies rather products to create energy-efficiency:

Heating, Ventilating, Air Conditioning (HVAC)

Insulation under the insulation tax credit program

Roofs (Metal and Asphalt)

Water Heaters (non-solar)

Windows and Doors

Biomass Stoves

Phase II of this program has been extended until Dec 31, 2016

Here are some details:

1) Similar to phase I, you can claim a 30% tax credit of the cost but now there is no upper limit

2) New homes (residential properties) are included in Phase II. Therefore, this could be an existing home or new home. So, you primary residence as well as your second home qualifies for rebate program. Rentals properties are still not included in Phase II.

The approved products that qualified under this phase are specifically focused on renewable energy technologies:

Geothermal Heat Pumps

Small Wind Turbines (Residential)

Solar Energy Systems

Click here for Solar Energy Rebates Program

Phase III of this program has been extended until Dec 31, 2016

Here are some details:

1) This phase add more rebates on top of II in that now you can claim 30% tax credit of the cost up to $500.00 per 0.5 kW (kilowatt) of power capacity. What this means is that not only can you get a federal tax credits for installing renewable energy technologies (not all qualify for this government rebate) but you can actually get your power bill reduced after the installations.

2) Similar to Phase II, new homes (residential properties) are included in Phase III. Therefore, this could be an existing home or new home. So, your primary residence as well as your second home qualifies for federal tax credits. Rentals properties are still not included in Phase III.

Another way to save money on your energy cost is get a home energy audit done. This allows you to get a sense of how much energy you consume in your house, how you can make it more efficient, and if installing renewable energy is a profitable choice for you.

The approved products that qualified under this phase are also specifically focused on renewable energy technologies:

Fuel Cells (Residential Fuel Cell)

Micro turbine System

Another tax credit that is on horizon is the "Community Wind Act" proposed in the congress. This will expand the existing tax credit to existing small wind projects that produce up to 20 MW electricity. Currently, this tax credit gets caped at 100 kW. The new piece of legislation removes this limitation and will promote community installations to create local economies and local jobs.

Therefore, do take advantage of these governmental rebates (including state incentives) and federal tax credits and federal tax credits as you start to power your house with clean technologies.

Go to Alternative Energy Investments from Federal Tax Credits

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Do you know of tax credits for renewable energy in your country?

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