Renewable Energy=Tax Breaks!!

[adam]

Choosing renewable, clean energy is not only good for the planet but it can also be good for the wallet. That’s because the American government has introduced consumer renewable energy tax breaks through the American Recovery and Reinvestment Act. These cover federal taxes; individual states sometimes offer specific renewable energy tax breaks.

Renewable energy tax breaks are usually offered as tax credits. A tax credit is generally more valuable than an equivalent tax deduction because a tax credit reduces tax dollar-for-dollar, while a deduction only removes a percentage of the tax that is owed. Consumers can itemize purchases on their federal income tax form, which will lower the total amount of tax they owe the government.

Residential renewable energy tax breaks (credits) are offered to consumers who install solar energy systems (including solar water heating and solar electric systems), small wind systems, geothermal heat pumps, residential fuel cell and microturbine systems. They can receive a 30% tax credit for systems placed in service before December 31, 2016. The previous tax credit cap no longer applies.
Alternative-fuel vehicles, diesel vehicles with advanced lean-burn technologies, and fuel-cell vehicles are also eligible for renewable energy tax breaks and so are plug-in electric vehicles starting January 1, 2010. The credit for passenger vehicles and light trucks ranges from $2,500 to $7,500, depending on batter capacity. The first 200,000 vehicles sold by each manufacturer are eligible for the full tax credit; the credit will then phase out over a year.

Finally, hybrid vehicle owners who purchase a qualified plug-in hybrid conversion kit are eligible for a 10% renewable energy tax break, capped at $4,000, through 2011.