You recycle, turn off lights that aren’t in use and do other little things in your personal efforts to “go green,” but now you’re thinking about creating a truly sustainable home with energy-saving and environmentally considerate appliances. Well, there’s good news for you. Not only will pitching in to protect the planet help you save on your energy bills, but some tax incentives will put a little green back in your bank account.
A tax credit is available to cover 30 percent of the costs associated with providing your home with alternative energy sources including geothermal heat pumps, small residential wind turbines, and solar energy systems. Geothermal heat pumps rely on the earth’s natural ground heat to provide heating, air conditioning and hot water. A wind turbine converts kinetic wind energy into electricity for your home, while solar energy systems use panels to collect radiant energy from the sun to convert into electricity. This credit is applicable on existing homes and new construction, as well as principal residences and second homes. The credit won’t be around forever though – it expires on December 31, 2016.
Fuel cells are a blossoming technology that involves the conversion of hydrogen into a cleaner alternative to gas and fossil fuels using electrochemical cells. A residential fuel cell system with a minimum efficiency of 30 percent and capacity of .5 kilowatts is eligible for a tax credit of 30 percent of the cost up to $500 per .5 kilowatts. The credit expires on December 31, 2016 and is applicable on existing homes and new construction as long as it is your principal residence.
Getting the Credit
If you’re already saving the planet with your sweet new energy efficient appliances, hopefully you haven’t already recycled the receipts and manufacturer’s certification statements. If so, you’ll need to obtain them and attach them to a thoroughly filled out IRS form 5695 when you file your federal income taxes in order to get a little green for going green.
Aside from the tax credits offered by the federal government, many incentives and rebates are offered at the state level, but programs vary and some have expiration dates or limits that depend on how much money the government has allocated for them. Visit DSIRE, the Database of State Incentives for Renewables and Efficiency (see Resources), to find out what’s available. Funded by the U.S. Department of Energy, DSIRE is a user-friendly, comprehensive database that enables you to see all the incentives that are available and how to get them by simply clicking on your state.
- Solar image by Thomas Leiss from Fotolia.com