Getting Charged Up About the Residential Energy Efficiency Property Tax CreditUpdated March 2, 2016 Tax Credits
The Residential Energy Efficiency Property Tax Credit is perhaps one of the greatest tax credits offered to families by the U.S. government.
When you upgrade your home to improve energy efficiency or to make renewable energy, you may qualify for the Energy Tax Credit. These are real dollars that come off the top of the your tax bill, so the savings are 100 percent yours.
Check Your Eligibility
When you upgrade to make your home more energy efficient, you also save money in monthly utility bills, so your savings continue to accrue long after a tax credit has been applied.
Also, when you go to sell your home, an energy efficient or renewable energy infrastructure is a selling point for cost conscious home buyers. Chance are, the homebuyer is much like you, and every dollar is important to them as well.
And last but not least, if you’re concerned with reducing your energy footprint, conservation, and the reduction of pollution and green house gases are important to you, you’ll be doing your part to help make the planet a better place for everyone.
Solar, wind, geothermal and fuel-cell technologies all qualify for the Residential Energy Efficiency Property Tax Credit. Specifically, this includes:
- Photovoltaics and solar panels that generate electricity that is used inside the home.
- Solar powered water heaters with water that is used inside the home. Solar heaters, hot tubs and swimming pools are not eligible.
- Wind turbines generating 100kw of residential electricity use.
- Geothermal heat pumps
- Fuel cells relying on a renewable energy source, such as hydrogen, generating power in a home.
The tax credit is equal to 30 percent of the cost of the equipment, which also includes installation. The good news is that there is no upper limit to the tax credit for wind, solar and geothermal equipment.
Check Your Eligibility
A Nonbusiness Energy Property Tax Credit also exists for those who meet Department of Energy technical efficiency standards. Improvements for this tax credit include qualifying home insulation, exterior doors, windows and skylights and some roofing materials. A second category for this tax credit involves residential energy property costs and includes qualifying items such as electric heat pumps and water heaters, central air conditioning, natural gas, propane, natural gas or oil furnaces and other related energy efficient systems. The credit is worth a maximum combined $500 for all years you seek to use it.
Many other tax credits are offered when it comes to alternative and efficient energy. Learn about the electric or hybrid car tax credit here.