How To Get Tax Credits For Energy Efficiency

How To Get Tax Credits For Energy Efficiency

Home Improvements

1. Assess if your home improvement project qualifies. Tax credits are available for projects like adding insulation, replacing windows, and adding some high efficiency heating and cooling equipment. For more specific information, see the EPAct Summary of Tax Credits for Homeowners from Energy Star.
   1. Between January 1, 2006 and December 31, 2007, the maximum amount of homeowner credit for all improvements is $500.
   2. If you are starting from scratch with new home construction, your project does not qualify for the tax credits for windows, doors, roofs, insulation, HVAC, or non-solar water heaters. Your project does qualify for tax credits for photovoltaics, solar water heating, and fuel cells.
2. Check out the guidance provided by the Internal Revenue Service.
3. For home improvement projects, you will need to fill out IRS Form 5695.

Efficient Cars

1. Assess if your car purchase qualifies. Tax credits are available for certain hybrid gasoline-electric, diesel, battery-electric, alternative fuel, and fuel cell cars. The amount of the tax credit will vary depending on the vehicle technology, fuel economy, and weight compared to base year models.
   1. Credits are available for cars starting January 1, 2006.
   2. Energy Star says, "There is a 60,000 vehicle limit per manufacturer before a phase-out period begins. Consumers who buy from companies that already sell large numbers of qualifying vehicles will experience a relatively short “window of opportunity” for the credits."
2. For hybrid vehicles purchased for personal use, fill out IRS Form 8910.
3. For hybrid vehicles purchased for business use, fill out IRS Form 3800.
   1. For updated information, check the IRS Summary of the Credit for Qualified Vehicles.

Solar Energy Systems

1. Assess if your solar water heating system is qualified. Tax credits are available for systems placed in service from January 1, 2006 to December 31, 2008.
   1. In order to qualify, at least half of the energy generated by the system must be generated by the sun.
   2. You may only claim spending on the solar water heating system property. You may not claim spending on the whole water heating system of your home.
   3. Your solar heated water must be used within the home.
   4. Your system must be certified by the Solar Rating and Certification Corporation (SRCC). For more information on certified systems, check out the SRCC certified systems listed on Green Home.
2. Assess if your photovoltaic system is qualified. Tax credits are available for systems placed in service from January 1, 2006 to December 31, 2008.
   1. The system must provide electricity for your home and must meet certain fire and electrical code requirements.
3. The tax credit amounts to 30% of the cost of the system, with a maximum of $2,000. This credit is separate from the $500 home improvement credit.
4. Fill out IRS Form 5695.

Fuel Cells

1. Assess if your fuel cell or microturbine system is qualified.
   1. Your fuel cell must have an efficiency of at least 30% and it must have a capacity of at least 0.5 kW.
2. Tax credits are available for systems placed in service from January 1, 2006 to December 31, 2008.
   1. Credits amount to as much as 30% of the cost (up to $500 per 0.5 kW of capcity maximum). This credit is separate from the $500 home improvement credit.
3. Fill out IRS Form 5695.

State Incentives

1. There are a variety renewable energy and energy efficiency incentives offered by federal and state agencies, state utilities, and local organizations. Financial incentives include tax incentives, grants, loans, rebates, industry recruitment, bond programs, and production incentives.
2. Check out the Database of State Incentives for Renewables and Efficiency (DSIRE). Click on your home state to see the list of state-specific incentives.
3. For local rebates, try using the Energy Star Rebate Finder.