Residential energy credit has been enhanced by congress for using solar power. Two other new energy systems have also been included under the new residential energy credit. This is made possible by the energy extension and improvement act.
When does it start?
The residential energy credit will begin on January 1, 2009.There are eight more years and this means the residential energy credit will extend up to 2016. The residential energy credit is currently 30% of the price of the full system. The $2000 cap of water heated by solar property has been removed in terms of expenses. A person who installs the property will now receive $3000 residential energy credit unlike previously when he/she was only receiving a cap of $2000.The property installed has to be worth $10000.The residential energy credit will be made ready at the beginning of the year 2009 so as to balance with an Alternative Minimum Tax.
Which other energy systems?
The residential energy credit will also include geothermal heat power and also small energy systems that use wind.
A small energy system that uses wind has also been included under REEP. A wind turbine must be used with the small wind property to produce electric energy. The minimal wind property must also be owned by the taxpayer. The wind property should also be used in conjunction with a dwelling unit inside the country United States of America. The enhanced residential energy credit bill does not consider this as a basic residence, therefore the taxpayer may receive REEP credits belonging to a residence that is secondary also. The residential energy credit cannot exceed $4000 as it is constrained to $500 for every ½ kilowatt.
Geothermal heat property.
The enhanced residential energy credit is also available for geothermal heat pump properties and goes at 30%. The properties are put together with a dwelling of the United States therefore, has to be a taxpayer’s residence. The same 30% residual energy credit is also given for secondary residences as well as $2000 is the limit for this residential energy credit.
Enhancement of the residential energy credit will also encourage investment by property owners in alternative energy. This new savings’ legislation is also real. Use of alternative energy has also been made affordable as it will balance the investors expenses in a way that also affects the savings. The federal government, by enhancing the residual energy credit, shows that alternative energy use can automatically work on behalf of property owners.
1. Residential Energy Credit, 1040.com
2. New Residential Tax Credits Available, boston.com