Information on Energy Efficient Tax Credits

To recieve the tax credit, you must have purchase and install qualifying energy-efficient property in your main home in the years 2006, 2007, and 2009. You must purchase new energy-efficient equipment, and the equipment is expected to remain installed for at least five years. The energy credit is not available for improvements made during the year 2008,  “Tax credits for these residential products, which had expired at the end of 2007, will now be available for improvements made during 2009. However, improvements made during 2008 are not eligible for a tax credit.” (this is from the EnergyStar Website)

Home improvements that could qualify as tax credits:

Exterior doors and windows, storm windows, skylights, metal roofs, insulation, central air conditioning and heating, geothermal heat pumps, hot water boilers, advanced main air circulating fans, biomass fuel stoves with a thermal efficiency rating of 75% or more, and asphalt roofs with cooling granules.

The Nonbusiness Energy Property Credit

You can receive a tax credit of 10% of the purchase price of qualified energy-efficient products. “To qualify, a component must meet or exceed the criteria established by the 2000 International Energy Conservation Code (including supplements) and must be installed in the taxpayer’s main home in the United States.” (stated from the IRS)

The tax credit for home improvement purchases is limited to $500. The $500 limit applies to the total credit you can claim for all years combined. A maximum of $200 of your $500 total limit can be used for purchasing windows.
The Residential Energy Efficient Property Credit

This tax credit provides a non-refundable tax credit of up to $2,000 for installing solar panels or fuel cell power plants in your home.

Check with your accountant to see if you qualify.

Solar Panels and Fuel Cell Power Plants (Residential Energy Efficient Property Credit) You can install “solar panels, solar water heating equipment, or a fuel cell power plant to their homes in the United States. In general, a qualified fuel cell power plant converts a fuel into electricity using electrochemical means, has an electricity –only generation efficiency of more than 30 percent and generates at least 0.5 kilowatts of electricity. Taxpayers are allowed one credit equal to 30 percent of the qualified investment in a solar panel up to a maximum credit of $2,000, and another equivalent credit for investing in a solar water heating system. No part of either system can be used to heat a pool or hot tub.”

This tax credit is available for wind and geothermal-powered systems as well,  recently added by the Emergency Economic Stabilization Act. Wind energy equipment will produce a tax credit worth 30% of the cost of the equipment, with a maximum credit of $4,000. Geothermal heat pumps qualify for a credit worth 30% of the cost, with a maximum credit of $2,000.

$2,000 for qualified photovoltaic property costs,  $2,000 for qualified solar water heating property costs, and $500 for each half kilowatt of capacity of qualified fuel cell property for which qualified fuel cell property costs are paid.

In addition, “A credit limit for residential energy property costs for all tax years of $50 for any advanced main air circulating fan; $150 for any qualified natural gas, propane, or oil furnace or hot water boiler; and $300 for any item of energy efficient building property.” (Stated from the IRS)

The Federal guidelines can be found on  http://www.energystar.gov/index.cfm?c=products.pr_tax_credits.