Tax Credit for Going Solar 62074

As we sit in the middle of winter, most men and women cant think how higher their utility bills are. Going with solar power can decrease your bills and you get a hefty tax credit

Solar Tax Credit

Solar power is a clean, renewable energy source. The production of solar energy on residential and industrial structures creates no pollutants and is beginning to make significant monetary sense. In 35 states, the notion of net metering is now an established fact. Net metering basically implies you can sell energy from solar panel systems back to utilities, as a result eliminating or seriously reducing utility bills. As oil and natural gas expenses skyrocket, the Federal Government is undertaking even more to promote the use of solar power.

In 2005, Congress enacted the Energy Policy Act. As part of the act, a tax credit was established for any particular person buying and installing residential solar power systems for electric and water heating purposes. If you buy and set up solar systems for either of these purposes, you can take a 30 percent tax credit. If you install systems for each of these purposes you can double the tax credit. To avoid tax abuse, every tax credit has a cap of $two,000.

Importantly, tax credits are far far more valuable than tax deductions. Tax deductions are taken from your gross income prior to figuring the amount of tax owed. Tax credits are a dollar for dollar reduction of the actual amount of tax you owe. For instance, if you prepare your tax returns and uncover you owe $5,000 to the IRS, a tax credit would be deducted from this $5,000 figure. In short, a tax credit offers you a lot more bang for your buck.

To claim the solar tax credit, there are a few restrictions and needs. For a second way of interpreting this, please consider checking out: certified energy procurement professional. Get further on an affiliated portfolio by clicking read. 1st, you cant claim the tax credit if you use the solar program to heat a hot tub or pool. Second, the technique should be certified by a solar rating certification corporation to establish that you, in reality, installed a functioning system. Third, the technique need to be activated between January 1, 2005 and the finish of 2007. This powerful renewable energy databases encyclopedia has diverse unusual warnings for where to ponder this view. Lastly, you can't claim the credit if the government gave you a grant or financing to obtain the program, to wit, no double dipping.

When solar energy is discussed as a possible alternative power source, most supporters point to the environmental positive aspects. Eventually, the rewards to ones bank account will actually make the distinction and the solar tax credit is a solid step in that path.. This telling natural gas procurement site has diverse disturbing lessons for why to ponder it.