Reduce Carbon Footprints with the Renewable Energy Tax Credit
Many homeowners have installed renewable energy systems in order to lower their long-term energy bills and reduce their carbon footprints. If you are a homeowner and are considering investing in renewable energy options to power your home, you should be aware of the federal residential renewable energy tax credit, which allows taxpayers to claim a credit of 30 percent of qualified expenditures for an energy system that serves a home located in the United States that is owned and used as a residence by the taxpayer.
Eligible energy systems include: solar-electric systems, solar water heating systems, fuel cells, small wind-energy systems and geothermal heat pumps. The home served does not have to be your principal residence, unless you install a fuel cell system.
Originally created as part of The Energy Policy Act of 2005, the tax credit has been extended until December 31, 2016. Over the years, Congress has also allowed taxpayers the ability to take the credit against the alternative minimum tax and has removed the maximum credit for all eligible technologies, except for fuel cells.
Eligible expenditures include labor costs for on-site preparation, assembly or original system installation, and piping or wiring to connect a system to the home. If the federal tax credit exceeds tax liability, the excess amount may be carried forward to the succeeding taxable year. The excess credit may be carried forward until 2016, but it is unclear whether the unused tax credit can be carried forward after then.
This tax credit is a wonderful incentive for homeowners who are interested in reducing their long-term energy costs and carbon footprints. If you are interested in more information regarding this tax credit, please take a moment to visit the U.S. Department of Energy’s residential renewable energy tax credit informational page at http://energy.gov/savings/residential-renewable-energy-tax-credit .