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How to Qualify for the Residential Renewable Energy Tax Credit

tax creditsUncle Sam wants to reward you for going green with a residential renewable energy tax credit. You can earn this credit by making qualified energy efficient-related improvements to your home—like installing new insulation or a solar heating and cooling system—thanks to the American Recovery and Reinvestment Act of 2009.

How to Be Eligible for the Residential Renewable Energy Tax Credit

You may apply for a tax credit by installing energy-efficient products or systems in your home that come with a Manufacturer’s Certification Statement. This is a signed statement that a manufacturer provides to certify that a product or component qualifies for a tax credit. If the statement doesn’t come with the product, you may find the Certification on the manufacturer’s website. It is important to note that while ENERGY STAR-labeled products may help you save energy, not all of them qualify for tax credit.

The American Recovery and Reinvestment Act divides the credits offered into two categories: renewable energy and home energy efficiency credits.

Credits for Renewable Energy Systems in 2015

  • Solar photovoltaic (PV) panels: The panels must provide power to the homeowner’s residence; provides a tax credit of 30 percent of the total system cost with no cap
  • Solar hot water systems: Only solar hot water systems are eligible, not backup water systems; the Solar Rating and Certification Cooperation (SRCC) must certify the system; provides a tax credit of 30 percent of the total system cost with no cap
  • Small residential wind systems: The credit applies to small wind turbines with a rated capacity of 100 kilowatts or less; provides a tax credit of 30 percent of the total system cost with no cap
  • Geothermal heat pumps: Must be ENEGY STAR-qualified; provides a tax credit of 30 percent of the total system cost with no cap

Credits for Home Energy Efficiency Improvements in 2015

The government provides a $1,500 maximum credit per homeowner for all the improvements made in a year combined.

  • Conventional HVAC: The tax credit applies to qualifying ENERGY STAR-labeled solar heating and cooling systems, central A/C, air-source heat pumps, advanced main air circulating fan, propane or natural gas furnaces, and hot water boilers powered with gas, oil or propane; provides a tax credit of 30 percent, up to $1,500
  • Roofing: The tax credit applies to ENERGY STAR-qualified asphalt and metal roofs; provides a tax credit of 30 percent, up to $1,500
  • Insulation: Must meet 2009 International Energy Conservation Code standards and amendments; product must have at least a two-year warranty; provides a tax credit of 30 percent, up to $1,500
  • Doors and windows: The tax credit applies to some ENERGY STAR-labeled products; skylights do not qualify; provides a tax credit of 30 percent, up to $1,500

To take the guesswork out of systems and improvements that qualify for the residential renewable energy tax credit, AAA Heating & Cooling can provide you the respective information regarding its products and services. To maximize your credit, keep in mind that it applies to the cost of the products, as well as the installation and labor. To learn more about improving your home’s performance, contact AAA today.

[Photo from 401(k) 2012 via CC License 2.0]