Tax credits tucked into the federal stimulus package are making renewable energy and energy-efficiency improvements much more affordable at a time when their popularity is rising.
The credits are part of the Energy Policy Act of 2005, so they aren’t new, but their limits were expanded this year by the American Recovery and Reinvestment Act.
For residential improvements in 2009, a home-owner can receive a tax credit up to 30 percent of the project’s cost for renewable energy systems, such as solar or wind power. For increasing the efficiency of a home by installing new windows or insulation, that 30 percent credit is capped at $1,500, according to the Database of State Incentives for Renewables & Efficiency.
With a credit that saves on the significant upfront costs, such as $8,000 to $12,000 for a two-panel solar hot water system, renewable and efficiency systems are becoming an affordable reality that will save in the long run.
"For every dollar you spend on efficiency, you’ll save $3 on your renewable project," said Kari Heinrich, solar hot water program manager for Focus on Energy. "The best dollars spent are on efficiency first."
Those in the energy industry are seeing the benefits of the credits as renewable energy systems become more mainstream.
Mark Klein, co-owner of Gimme Shelter Construction in Amherst, said he is hearing about more and more people looking at renewable systems as an investment that can yield a solid return.
"The excitement and the fact that the new economic stimulus package has federal tax credits has helped this be a reality for people," Klein said. "It used to be people looked at renewable systems and thought, ‘How long is it going to take to get my money back?’"
Getting the word out about the credits and how to use them was an easy process for businesses at the Midwest Renewable Energy Association’s Energy Fair over the weekend.
Homeowners could learn about the credit and how to claim it with federal taxes in one tent, and as they walked down the next row, sample dozens of renewable and efficiency options.
"Most people don’t really know about it yet," Photovoltaics Systems owner Jim Kerbel said of the credits. But as people become more informed, "business has really kind of skyrocketed."
