Energy Saving Measures that Generate a Sizable Tax Benefit
Everyone loves getting money back come tax time, but sometimes it can be confusing to understand where you can be saving. To help you understand energy savings and tax benefits, it’s a good idea to catch up on your energy-related tips, offered by the Alliance to Save Energy’s Director of Government Relations, Rob Mosher.
As the New Year commences, Mosher says homeowners could be eligible to receive a sizable tax return if they invested in an electric vehicle, geothermal heat pump, or fuel cell system in 2012.
Certain electric vehicles acquired after 2009 are eligible for up to $7,500 in tax credits. Qualified plug-in electric vehicles qualify for a $2,500 tax credit, and the credit increases by $417 for each additional kWh of battery capacity up to $7,500.
A complete list of vehicles eligible for this tax credit is available at fueleconomy.gov.
Mosher says geothermal heat pumps installed anytime since 2009 in a main or second home qualify for a federal tax credit. These are similar to traditional heat pumps, but use the earth’s natural heat to control the temperature of your home more efficiently.
The federal government is offering a tax credit of 30 percent of the installation costs, with no upper limit. All EnergyStar geothermal pumps qualify and are over 45 percent more efficient than standard models.
Visit EnergyStar.gov for more detailed information on qualified heat pumps and tax filing.
Installing residential fuel cell systems provides another opportunity for homeowners to save money and utilize federal tax incentives, according to Mosher. Fuel cells produce electricity through a chemical process of combining oxygen with hydrogen extracted from natural gas or propane.
While these systems can be expensive, they can also:
Supply a steady portion of the home’s electric energy needs;
Allow for excess electricity to be sold back to the local utility, and;
Power the home during power outages
The tax credit covers 30 percent of installation costs (up to $1,000 per kWh) for fuel cell systems placed in service in 2009 or later on a non-business property. Learn about fuel cell qualifications from the U.S. Fuel Cell Council at www.eere.energy.gov.