For those who are making the effort to conserve and heal our environment for the generations to come, the government is happy to reward you in the form of considerable tax credits. These credits apply if you purchase selected energy-efficient products or install a renewable energy system for your home, and in some cases these can apply to your second home as well.
The biggest credits are available for people who convert their energy sources to solar, geothermal or wind (kinetic) generated energy, as you can claim 30% of the equipment purchase price and installation costs. There are a few qualifying conditions attached, such as the power generated must account for 50% or more of the energy used in the home, and sadly does not include the cost of heating your hot tub or swimming pool, but the good news is that there is no upper limit to the amount that qualifies for the credit and you can also get tax credits on the cost and installation of any additional fuel cells. Tax credits can be carried forward for these major installations, so if you left it too late to claim for 2009, or will not be able to use all your tax credit in 2010, the government will allow you to keep carrying the tax credit forward until 2016.
Converting your whole house to run on natural energy sources may be a larger step than you are able to take at present, but there are other areas around the house that you will receive a tax credit for.
Biomass Stoves burn biomass fuels such as wood wastes and residues, plants, grasses and fibres. If you install a biomass stove in order to provide hot water and heating in your home, you would qualify for 30% tax credit up to $1.500. The same credit applies to selected heat pumps, air conditioning units, hot water boilers and gas, propane and oil furnaces.
Insulating your home is one of the most cost effective measures you can take to reduce heat loss, and this also qualifies for a tax credit, as do certain roofing materials that reflect the heat from the sun and prevent your house from heating up (and therefore requiring you to put the air-conditioning on!). By switching to thrifty thermal water heaters and installing energy-efficient doors and windows, you will save on a lot of the costs associated with heating or cooling your home – and profit with a tax credit.
In order to claim, you need to keep your receipts for the purchase price and installation costs (where applicable) and also have the manufacturer´s certification statement to submit with your tax return. Each item is only given one tax credit per year per property. So, if two unattached people who live in the same property both spend $1.000 towards new windows, each will only be able to claim $750 x 30% tax credit.
Further state bonuses are available for purchasing an electrically driven vehicle or converting an existing vehicle to be electrically operated. Tax credits of 10% of the cost are available up to $7.500 depending on the power of the battery, and that the vehicle is one that has to be “plugged-in” to be recharged. There are also advantages for owners of vehicles that run on alternative-fuel, diesel vehicles with advanced lean-burn technologies and “fuel-cell” operated vehicles.
With lower energy bills from energy-efficient installations, and tax credits from the government, there has never been a better time to Go Green!