Daycare Tax Tips

Energy Credit for Solar Property

Want to generate electricity using solar panels or a windmill?

In addition to the energy credit for home improvements, you can claim a Residential Energy Efficient Property Credit equal to 30% of the cost for property that uses solar energy to generate electricity or heat water for your residence. You can also claim this credit for property that uses a wind turbine to generate electricity in your residence, or equipment that uses the ground or ground water to heat your home.

This credit is available for existing homes and new construction through 2016 with no upper limit, except as noted later in this article.

The following property qualifies for the credit:
• Solar electric property;
• Solar water heating property;
• Fuel cell property;
• Small wind energy property; and
• Geothermal heat pump property.

This credit equals 30 percent of the cost of purchasing and installing such property. After 2008, there is no dollar cap on the credit, with the exception of the maximum credit for qualified fuel cell property, which is $500 for each 0.5 kilowatt of capacity.

Like the energy credit for home improvements, you may claim this credit regardless of your modified adjusted gross income, and it is nonrefundable. However, any unused credit may be carried forward and added to the credit for that year. This credit is available through 2016, so you should benefit from it eventually.

Posted on 2009-06-27 00:06:47