Federal Energy Tax Credits for Homeowners

by EVstudio AEP on November 25, 2010

Many Federal tax credits for consumer energy efficiency y upgrades are ending on December 31st of this year. However, there are still a handful of other credits that will last through 2016.

There are two groups of tax credits in this second batch. The first gives a 30% tax credit with no upper limit on the cost. The credits are available for upgrades to existing homes and new construction.  Principal and secondary homes both qualify. Installation costs are also covered in this credit as many really benefit from professional installation due to complexity and in order to ensure safety and proper functioning.

Geothermal heat Pumps

A geothermal heat pump uses the natural temperature of the earth to heat and cool a building. These systems are very efficient and also provide comfortable heating and cooling. There are three types included in this tax credit: closed loop, open loop and direct expansion. The type used depends on the realities of your property.

Small Wind Turbines for Residential use

Small windmills are emblematic of the Midwest and the early days of the United States. Back then they were typically used to pump water for ranchers, farmers and others. Today small windmills are used for electricity generation.

Solar Energy Systems

Solar Water Heaters

These systems use the sun to heat water for a variety of uses. To qualify for the tax credit the water must be used in the home and not for swimming pools or hot tubs.

Solar Panels (Photovoltaic)

Solar panels are very popular right now and keep going down in costs and thus decreasing their payback period. Since they use the sun it is critical to have clear access to the southern sky for as much of the day as possible.

The second grouping of tax credits only includes one item. This credit is also goes through 2016 and is good for 30% of the cost up to $500 per 0.5 kW of power capacity. New and existing homes qualify but they must be a principal residence. Second homes and rental units do not qualify for this rebate.

Fuel Cells

Fuel cells create electricity from combining oxygen and hydrogen. The primary byproducts are water and heat. The water can be captured for use and the heat can be used as well. Residential fuel cells typically use propane or natural gas. Both of these are cleaner than gasoline and coal. In order to qualify for this credit the fuel cell must have a capacity of at least 0.5 kW and 30% efficient.

These tax credits are great for new custom homes but can also be incorporated into your existing home as part of a remodel or addition. Navigating which energy credit is best for your situation can take some time yet pay off quite well in the future. Talk to your friendly EVstudio architect, engineer or LEED AP for more information on getting started.


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