There are a lot of reasons to be more energy efficient. Saving energy reduces your carbon footprint. It reduces your monthly power bills and saves money. In some instances, it can even save you money on your taxes. It’s true! There are quite a few different credits and benefits that you can claim on your taxes when you work to make your home more energy efficient. Here are just a few of them.
On the federal level
You can get a tax credit for up to 10% of the cost (up to $500 worth) off of insulation, non-solar water heaters, roofing products, adding an Advanced Main Air Circulating Fan to your furnace or installing a biomass stove.
You are eligible for up to 30% of the cost (with no cap on cost) of installing systems for solar or wind energy (including smaller wind turbines) and geothermal powered heat pumps.
You can get a tax credit for up to 30% of the cost (up to $500) of installing fuel cells (both residential and micro turbine). Fuel cells are cleaner and more efficient than the traditional gasoline and fossil fuel combusting systems being used.
There are even a couple of tax credits for building homes that are more energy efficient. There is one for regular homes and one for manufactured homes.
If you aren’t sure whether or not an improvement qualifies for a tax credit (or want to make sure you choose the materials that do qualify for tax credits), talk to both your accountant and your supplier. They should each be well versed in which things are covered under the federal tax credits. It’s better to find out beforehand than afterward!
Tax credits are available on the state level as well. They vary from state to state, though, so don’t assume that because you qualified for something at your old place in New Mexico that you will still qualify when you set up your home or business offices in Texas.
Using the Texas example, before you start checking out your available tax credits, you’ll want to make sure that you are getting a good rate on your energy consumption. Texas’s energy market is deregulated so you get to choose who provides your utilities (use TexasElectricityProviders to compare prices and features).
In Texas, most tax credits fall under the “tax rebate” category. They vary from city to city and even from provider to provider. The most common rebates are offered to residents who install energy efficient or environmentally friendly weatherization, heating and cooling devices and systems and for construction or the remodeling of a home. You can check out what’s available in your area by using the Department of Energy’s website that breaks down the different credits and rebates based on type and location.
Tax rebates and credits are just the incentive that a lot of people need to make smart and environmentally friendly changes to their home on a large scale. Don’t forget, though, that there are changes you can make on a smaller scale as well!