Alternative Energy Answers

| February/March 2006

Tax credits for energy-efficient home improvements; blower door tests to fix drafty houses; and preventing window condensation.

By Ken Sheinkopf


Back in the early 1980s, we bought a solar water heater for our home and took advantage of a great federal tax credit (I think it was around 40 percent). I heard on the news that the new energy bill signed by President Bush has tax credits for solar energy systems. Are these the same credits we had before?

—Joseph W.
Scranton, Pennsylvania

Actually, they are much more comprehensive. The Energy Policy Act of 2005 is the first major federal government program for energy in the past 13 years, and it gives tax credits far beyond the solar-only ones that started during the Carter administration and ended in 1985.

The new bill provides tax credits for highly efficient new homes, improvements to existing buildings, high-efficiency air conditioners and home fuel-cell systems, as well as solar water-heating systems and photovoltaics (solar electric systems) installed after Jan. 1, 2006.

Credit amounts range from 10 percent to 30 percent—or offer a fixed dollar amount depending on the measures you take—and you can take advantage of multiple tax incentives when you buy a home or improve your current one. Keep in mind that these are credits, not deductions. The amount of the credit is subtracted directly from the taxes you owe, unlike deductions, which are subtracted from your income to determine your tax liability.

1/2/2008 1:59:34 AM

I built my first solar home with old tech over 25 years ago and would like to do it again. I am a little confused about how much an energy efficient 720 sq ft converted container home would use without loosing all of the modern tech

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