Federal and State Tax Credits in Relation to Energy Conservation at Home
Renewable energy and energy saving technology are very attractive to home owners right now, particularly with all the environmental threats the public has recently become aware of. The current state of the economy and the fast depletion of non-renewable energy resouces are also prompting people to become more energy conscious.
There are things you can do to make your home more energy efficient. These include installing renewable-energy-generating equipment, such as small wind turbines and solar panels. These are cost effective, especially in rural areas when the only way to get energy is through running power lines from a grid. Solar and water powered generators also reduce the need for gas or electricity to heat homes. This comes from an electric company that either buys excess power from existing consumer solar reserves or utilizes renewable energy power supplies such as solar or wind power.
Making your home more energy efficient does not necessarily reduce the amount of power you use daily. But they may greatly reduce your home’s carbon footprint. These items include programmable thermostats, new insulation installation, and new energy-efficient windows and doors.
The federal and state government can actually give you tax credits if you install alternative energy sources, like solar panels, in your home. One of these tax credits is called the Home Energy Efficiency Tax Credit. When a homeowner purchases and installs energy efficient products such as doors, heating and cooling equipment, windows, and insulation for use in existing homes, they can receive a tax credit of up to 30%, with a maximum of $1,500 for all purchased items placed into service by 12/21/10.
Almost every state has tax credits and loans available to help homeowners transform their residence into a more energy-efficient one. California allows exclusive property taxes, meaning, they will not have to pay the extra taxes associated with improvements on homes, especially if they attain and install solar energy systems by 12/31/2016. These improvement purchases include solar air-conditioners, active solar energy systems, solar heating systems, solar water heaters, and thermal electric systems.
Arizona has a program that deducts the income taxes of taxpayers who sell one or more single-family homes that are energy efficient. This tax credit has a maximum of $5,000 of the sales price and it must be taken within the same year.
New York has property tax incentives as well. If homeowners install eligible energy-efficient technology, they will be exempted from paying real estate property taxes. Installing this equipment can also increase the value of a home. These tax exemptions include school district taxes, special additional taxes, and several municipal property taxes. This incentive was enacted in 1977 by the New York state government.
Hawaii also has an incentive program that was enacted in the earlier days of energy-efficient technology in 1976. Hawaii Energy Tax Credits gives the homeowner an income tax credit of 20% of the equipment costs of a wind powered system and a 35% tax exemption for the cost of solar systems, like water heaters and home heaters.
Every year, more and more people decide to make their homes more energy efficient by using renewable energy resources. This increases the value of a home because fixed utility bills make the home more cost-efficient to live in and the home’s carbon footprint will be also reduced dramatically.