Great News for Solar!

It looks like the tax credits for alternative energy are getting renewed after all!  The “Emergency Economic Stabilisation Act of 2008″ preserves the previously expired (at the end of 2007) tax credits for homeowners who install one of the following technologies: insulation, replacement windows, water heaters, and certain high efficiency heating and cooling equipment. Be sure to check EnergyStar.gov for rules and more details, as not all Energy Star rated improvements are eligible for the tax credit.  This includes solar water heating and several other technologies.

You will only be eligible for the credit for construction starting in 2009 or later, so consider holding off on the home handy work for a few months (like we need another excuse to procrastinate!).  Here is a partial list of the credits available, as taken from this site:

  • Windows: 10% of cost, up to $200, for qualified ENERGY STAR windows, skylights and storm windows
  • Doors (exterior): 10% of cost, up to $500, for qualifying doors (most ENERGY STAR doors will qualify)
  • Roofs (metal): 10% of cost, up to $500, for qualifying ENERGY STAR metal roofs
  • Insulation: 10% of cost, up to $500, for qualifying insulation (not vapor retarders or siding)
  • Air Conditioning (split or package systems): $300 for qualifying systems, not all ENERGY STAR systems qualify
  • Water Heaters (tankless only): $300 for qualifying systems
  • Cars: Credits are available for certain cars, and is limited by 60,000 per manufacturer before a phase-out period begins
  • Solar Water Heating: 30% of cost, not available for water heaters used for pools or spas
  • Solar Power (Photovoltaic): 30% of cost, must provide electricity for the home
  • Fuel Cells: 30% of cost, up to $1,000 per kW of power that can be produced

H.R. 1424 improves the federal solar tax credit from a flat $2000 to 30% of total system and installation costs (and anyone who has done an installation of this type knows how huge a news item this really is!), and also gives commercial solar companies and power utilities the opportunity to get in on the rebate action too, so now you may be able to talk to total price of a commercial install down into the realm of affordability.

Of course, let’s not forget that many states offer their own incentives for switching to solar or other forms of alternative energy in addition to this tax credit, so you may end up getting well near 50% off of your installation costs!  Now that’s something any shopper can appreciate!.  The credit is now extended (as part of the Wall Street Bailout) for the next eight years, so expect some great new solar innovations soon as companies rush to fill the market demand.

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