Beefy Solar Tax Credits Included in Federal Bail-Out BillBy Matthew Wheeland - October 6, 2008
The $2000 Federal Solar Tax Credit for residential solar energy installations was slated to disappear at the end of 2008.
Many times Congress has attempted to pass a bill to extend solar tax credits and many times the bills have failed. It was looking pretty bleak until some tax incentives for renewable energy were added on to the Emergency Economic Stabilization Act of 2009.
There are many solar tax credits but here are the most important ones applicable to the residential market and what they mean:
(Keep in mind we are not tax professionals and please don’t act on any of this information without consulting a tax professional.)
1. 30% Federal Solar Tax Credit Extended
The 30% Tax credit was extended for 8 years, and the $2000 cap was removed for residences. That means huge things for the residential market and your pocketbook, as well, if you install solar energy on your home. Let’s say the average solar installation is $30,000, well now you’re talking about $10,000 in tax benefits vs. the old $2000… it’s a big change. The new way starts on Jan 1st, 2008, and the demarking event that decides when it was “placed in service” is the interconnection by the utility.
2. Alternative Minimum Filers can now get the credit
This used to kill a lot of projects on small commercial applications when the owners or partners were paying AMT… now they can still take advantage of the 30% investment tax credit for solar.
More information: Solar Tax Credits, Incentives, and Rebates by State and City