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Energy Tax Credit

Energy Tax Rebate

As part of the US government’s endeavor to encourage Americans to go green, the IRS is offering incentives for purchasing energy-efficient products and renewable energy systems. If you buy certain energy-efficient products for your home or environmentally-friendly vehicles in the year 2011, you are entitled to claim a federal tax credit. While some energy tax credits are only available in 2011, others are valid until 2016. Here is a list of products that qualify for energy-efficiency tax credits.

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Biomass Stoves

If you buy a biomass stove that has a thermal efficiency rating of 75% of more for your home, you can claim a federal tax credit of $300. This tax credit includes the cost of installation, and it is only available in 2011.

Heating, Ventilation, and Air-Conditioning (HVAC)

You will qualify for an energy tax credit of $300 if you purchase central air-conditioning or electric heat pumps. For purchases of furnaces and boilers, the tax credit is $150. If you buy advanced main air circulating fan, you can claim $50. These tax credits are also only valid in 2011.

Insulation

The IRS offers a federal energy tax credit for the purchase of insulation materials and systems that meet the requirements of the 2009 International Energy Conservation Code and Amendments. This credit is 10% of the cost of the materials and systems, with a limit of $500, and it does not include the cost of installation and labor.

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Roofing

All metal and asphalt roofs that are Energy Star qualified are eligible for energy-efficiency tax credit. If you purchase these products, you can claim 10% of their costs, up to a limit of $500.

Non-Solar Water Heaters

A tax credit of $300 is available for the purchase of gas, oil, and propane water heaters, as well as electric heat pump water heaters. All Energy Star qualified gas tankless water heaters and heat pump water heaters are eligible for this credit.

Federal Energy Tax Credits
Windows, Doors, and Skylights

Energy Star labeled exterior windows, doors, and skylights qualify for an energy tax credit of 10% of their costs. Doors and skylights are capped at $500, and the limit for windows is $200.

Geothermal Heat Pumps

If you buy a geothermal heat pump for your home, you can claim 30% of the total cost of your purchase and installation. This credit has no upper limit, and it will be available until 2016.

Solar Energy Systems

For purchasing a solar water heating property or a photovoltaic system, you will be eligible for a tax credit of 30% of the total cost, including installation. There is also no limit for this credit.

Wind Energy Systems
Federal Energy Tax Credit

Residential small wind turbines with a nameplate capacity of 100 kilowatts or less qualify for energy-efficiency tax credit. The tax credit is also 30% of the total cost, without upper limit.

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Federal Solar Investment Tax Credits
Fuel Cells

Tax credit for residential fuel cell systems is 30% of cost, and the limit is $500 per 0.5 kilowatt of power capacity.

Plug-In Electric Vehicles

You can also claim tax credit if you purchase a plug-in electric vehicle or a small neighborhood electric vehicle. Depending on the capacity of the battery system, you can avail of up to $7,500 worth of tax credit.

Ever wondered why we can’t catch a break for being willing to clean up our act? Then you’ve been wondering about energy tax credits this whole time! It should be obvious that business within every spectrum of society is not quite the same in the year 2011 as things were in 2010, which now seems so far away. The energy tax credit for 2011 is not as hefty of a bonus as it was in the past, but a bonus it remains! You should never, ever, give up on a suspected financial opportunity. A thousand dollars or less may seem like not too much in the long run, but this is a mental mistake, I repeat, do not shrug off a bonus of seemingly small stature. Got that? Ok.

So basically, the energy tax credit was put into existence to help make it worthwhile for large amounts of citizens to install certain equipment around the home that would make the house more energy efficient, in regards to heat and energy. The more people who make conservation related decisions in the home (and in the businesses) then the bigger a positive impact we can have on the world as a country. This is important because the United States is one the biggest contributors to waste, energy inefficiency, and noxious by-products of our daily lives in general. I’ll say it again, we, the United States are responsible for some of the worst filth ever to pollute this planet. So the energy tax credit was a way to spur money being put into green-oriented products and companies.

This “middle-America” targeted tax credit includes but is not limited to: energy efficient windows, roofs, doors, water heaters and more. There are also tax credits for solar energy systems, fuel cells, hybrid vehicle plug-ins, and wind-energy systems.

The cap amount of the 2010 credit was 1,500 dollars but as of 2011 is only up to 500 dollars. The 500 dollars must be 10% of the cost of your energy efficient upgrades, where as the 1,500 dollars of old had to be 30% of the total cost.

Under the new energy tax credit, only 200 dollars can be allotted for energy-star windows. Furnaces must now be 95% efficient as opposed to last year’s energy tax credit requirements of 90%, and only have 200 possible dollars allotted to their cause. Yes it seems awfully silly for a change of 5% in efficiency to be the thing which will determine your eligibility or not, it’s almost self defeating. Wood burning systems are eligible for a maximum 300 dollar credit.

So, all of that can only be combined out of the maximum 500 dollars of the total energy tax credit allowed, and, if you have already cashed in on an energy efficient tax credit during one of the previous years, you are not eligible for one this year! It seems as though there might or should be something more than this “incentive” available for all of us out there. Energy efficiency should start with the smaller appliances in the house if we were being practical. To be truly effective, different standards would be needed to be imposed on manufacturers and designers, but lo and behold the energy tax credit might just be a sales pitch this year.