Save Money and Energy with New Tax Credits
(Page 2 of 3)
Nov. 24, 2008
By Megan Phelps
Then in October, these new tax credits passed as part of the economic bailout package. So now the tax credits for efficiency are back, the solar tax credits have been extended, and in a few cases, these incentives have been expanded. They all go into effect Jan. 1, 2009.
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What exactly is covered?
For a more complete summary of the new energy incentives, this list of tax credits on the Energy Star Web site is a good place to start. It has more details, and even links to the tax forms you’ll need. But here’s a general idea of what’s included:
- You can get a total of $500 per taxpayer for making home improvements to increase energy efficiency. Improvements that qualify include installing new windows, additional insulation, and more energy-efficient water heaters and furnaces. (Ed. Note: in February of 2009, this amount was increased to $1,500.)
- The tax credits for installing solar panels were extended. That means home solar-electric systems qualify for tax credits, as do solar water heaters. Both qualify for 30 percent of the cost of the project. (Solar water heating is capped at a $2,000 credit; solar-electric systems are not capped.)
- Now more types of renewable energy systems qualify for tax credits, including wind turbines (up to $4,000). Tax credits are also available for home fuel cells (30 percent of system costs), geothermal heat pumps (up to $2,000), and biomass stoves, such as woodstoves or pellet stoves ($300).
- There's a new tax credit for plug-in hybrids ($2,500 to $7,500) although it gets phased out as more models of these cars are sold. Also, an earlier tax credit for gasoline-electric hybrids is still in effect. Toyota and Honda vehicles no longer qualify because of the number of those models that have been sold, but tax credits are still available for Ford, GM and Nissan hybrid vehicles.
