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Save Money and Energy with New Tax Credits

Homeowners can now get more money back for investing in renewable energy systems or for making energy-efficiency improvements.

| Nov. 24, 2008

  • Cash in Hand
    New tax credits mean more money back for people who purchase solar panels, wind turbines, woodstoves, energy efficient windows and more.
    ISTOCKPHOTO/RYAN KELLY

  • Cash in Hand

Good news! Renewable energy systems just got a little more affordable. Thanks to federal tax credits that will go into effect in January 2009, U.S. homeowners can get money back if they purchase wind turbines or solar panels next year. There are tax credits for energy efficiency, too — including projects such as adding more insulation to your home, or buying energy-efficient windows.

All this is good news for the planet, because it encourages renewable energy and reduces the use of polluting fossil fuels. It’s also good news for your wallet, because over time, these types of energy upgrades can save you a lot of money.

How do the savings add up? 

Whether you’re buying a wind turbine or new windows, most home energy upgrades require spending money now to save money later through reduced energy bills. Some of these projects are big investments, costing thousands or even tens of thousands of dollars.

How it all pencils out will depend on the details of your project, but with the new federal tax credits you can count on getting some money back quickly. The tax credits for energy efficiency cover up to 10 percent of many home improvements, up to a total of about $500. Even better, the new tax credits cover 30 percent of the cost of most new renewable energy systems — which can add up to thousands of dollars. For example, the maximum tax credit for installing a wind turbine is $4,000.



(Ed. Note: The economic stimulus bill passed in February of 2009 made some of these credits even better. The increased credits cover 30 percent of the cost of energy efficiency improvements, up to a total of $1,500. Read more details here.)

Does any of this sound familiar? 

No, it’s not déjà vu — you probably have heard all of this before. A similar group of tax credits went into effect in 2006. (You can read our earlier articles about those tax credits here and here.) But most homeowner incentives for energy efficiency expired at the end of 2007, and the tax credits for installing solar energy systems were due to expire at the end of 2008.

timfoutz
3/30/2009 10:33:32 AM

Patricia; those tax cuts were put in place by the Republicans in Congress and signed into law by GWB. They were ended by your buddies the Democrats. Presidents DO NOT fund anything they just say yes or no to what Congress funds or does not fund. Congress controls controls taxes not Presidents. Learn about the Constitution and get a clue. blainenay; you are wrong as well! Congress should fund solar and wind etc. This must be done for strategic reasons. In addition congress needs to force thru measures to accelerate the building of modern nuke plants that us thorium for fuel. They can't melt down and to totally safe. I do admire your libertarian/conservative views but this country must control it's energy supplies by whatever means we have to use.


timfoutz
3/30/2009 8:04:11 AM

Patricia; those tax cuts were put in place by the Republicans in Congress and signed into law by GWB. They were ended by your buddies the Democrats. Presidents DO NOT fund anything they just say yes or no to what Congress funds or does not fund. Congress controls controls taxes not Presidents. Learn about the Constitution and get a clue. blainenay; you are wrong as well! Congress should fund solar and wind etc. This must be done for strategic reasons. In addition congress needs to force thru measures to accelerate the building of modern nuke plants that us thorium for fuel. They can't melt down and to totally safe. I do admire your libertarian/conservative views but this country must control it's energy supplies by whatever means we have to use.


Patricia George_4
3/6/2009 10:33:45 AM

Last year, we invested in lots of things to make our home more energy efficient. We had solar reflecting film on all our windows. We added extra insulation under the new roof. The metal roof we chose had an energy efficiency rating for reflectivity which is important here in the extreme Arizona summer heat. We installed solar panels connected to the grid as an important step in reducing our carbon footprint and reducing our dependence on foreign oil. We downloaded the Energy Star tax credit forms on the window film, insulation, and metal roof with the efficiency rating so we could apply them for tax credits on our 2008 tax return. We received the huge rebate from Arizona Public Service that almost reduced our cost in half on the solar panels. We received the Federal and State income tax credits on the solar panels also. But, George W. Bush, in his infinite kindness and wisdom...choke, barf, gag.....declined to renew the credits for storm windows, doors, anything energy efficiency attempts for taxpayers for the tax year 2008. It will apply in 2009, but not for the year 2008 in which many folks like us spent lots of money to become more energy efficient. So, while the solar panels were included in tax credits, any other attempt was a slap in the face by this dictator. Oh, and solar water heaters were included in the credits, but we spent all we could afford and did not invest in them. Buyer beware. We thought we were going to get the credits that should have been renewed by the departed idiot in the White House, but we were wrong. We are not sorry we did not wait until 2009, but we had to walk the walk to become more Green. Hope this did not hurt other folks trying to do what was right.







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