Solar Panels: Using a Bright Idea to Bring You Cool Tax Benefits
Written by Adam Ciboch on Tuesday, June 28th, 2011 in Misc.
Very soon, your electricity bill could take a permanent dip, potentially. In order to save money, homeowners are increasingly turning to solar energy. If you want to be both environmentally friendly and save some money, solar panels could help you achieve both. This could include tax rebates, avoiding sales tax on solar panel installation expenses and more. You’ve got to love it, right?
Even the federal government is getting on board, trying to create tax incentives to people who use energy more responsibility in the past five years. A prime example and the first of its kind was the Energy Policy Act in 2005. You could earn it simply by choosing renewable over non-renewable energy. If you’ve been a homeowner long enough, you’ll realize that some big changes have gone into effect, as there used to be very few incentives for homeowners to make the switch to renewable energy.
With the Energy Policy Act of 2005 alone, homeowners can receive a tax credit of up to $2000 or 30% of what they invested in purchasing solar panels. While originally only benefiting homes existing from 2005-2007, it was extended to cover almost any home in the United States primarily using solar energy back in 2008. This includes homes built through January 2009.
The Emergency Economic Stabilization Act was passed in 2008 in addition to this act. Solar panels are just one of the ways it provides people with even more incentives for using solar energy. It also adds more credit for people who intend to do home improvements in 2009 or beyond, as well as extending the Energy Policy Act of 2005. This bill favors the 30% rebate on investments in solar energy and removes the $2000 tax credit maximum. It is even retroactive in some instances.
Individual states also may have state tax incentives for using solar panels on your home. Some of these states include New Mexico, Florida, Vermont, Minnesota, Washington, New York, Texas, Virginia, Arizona and California. While some states have tax rebates, others carry no sales tax on solar panel equipment costs. It is certainly worth looking into, if you’re considering going the environmentally friendly route. Solar panels can be installed by professionals or can be purchased in do-it-yourself kits. Either way, the tax incentives are well worth the switch.
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