Solar Power Rebates
Of the many variables to consider before adding a
solar or wind power system to your home or business, one of the more significant
are those concerning taxes. The feds (and most states) are now offering an array of tax breaks for individuals opting to
add sustainable energy systems. Obviously, one has to add up the total costs of
adding a sustainable energy generating system against the incentives of tax
breaks and dollars saved by not using grid-delivered energy. But taxes (or tax
rebates) will become a part of your specific equation regardless. The information below
applies to U.S. based readers only - other countries may or may not have their
own incentive programs.
Earlier this year (2009), the American Recovery and Reinvestment Act (ARRA) was enacted. If you are planning to add alternative energy production to your home, you have three options for taking advantage of the ARRA:
-
Tax credit based on the amount of money invested in your project
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Tax credit based on the amount of energy produced by your project, or
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A grant from the feds to build your project
If you decide to use the first option - taking a tax credit for the funds invested
- you'll receive a 30% tax credit on your total alternative energy investment. This may or may not give you more
dollars vs. taking a credit based on energy production, which allows up to 2.1 cents of tax credit per kilowatt-hour (kWh) produced by your panels or turbines.
If you claim the grant, you must begin building your alternative energy system either this year or next (2009-10). Construction must be completed by 2014, or 2013 if the system involves wind energy. The government will issue a grant equal to 30% of the total cost of the project. Not bad if you're dropping $30k or so. Taking the grant means you can't take advantage of either of the credits (just so you're clear!) The IRS says that the grant won't be affected by your income. Nice if you've got a few bucks and still want to save on the building of your solar or wind farm.
Obviously, these criteria are subject to change. However, this information comes straight from the IRS site. Contact your accountant for the complete lowdown. Also, be sure to check out your state's smörgåsbord of tax incentives - some of which can be found here.