• E-mail
• Print
• Comment
• Font Size
• Digg
• del.icio.us
• Discuss article

Solar Tax Credits Get Improvement

Posted on: Tuesday, 1 November 2005, 03:01 CST

By Ken Sheinkopf< Knight Ridder

Q: Back in the early 1980s, we bought a solar water heater for our home in Colorado and took advantage of a great federal tax credit (I think it was around 40 percent). I heard on the news that the new energy bill recently signed by the president has tax credits for solar. Are these the same as what we had before?

A: Actually, they're a lot better.

The Energy Policy Act of 2005 is the first major federal government program on energy in the past 13 years, and it gives tax credits far beyond the solar-only ones that started during the Carter administration and ended at the end of 1985.

The new bill provides tax credits for highly-efficient new homes, for improvements to existing buildings, high-efficiency air conditioners and home fuel-cell systems, in addition to solar water heating systems and photovoltaics (solar electric systems) installed starting Jan. 1.

Though the amount of the credits ranges from 10 to 30 percent or offers a fixed amount, depending on the measures you take, you're eligible to take advantage of several tax incentives when you buy a home or improve your current one. Keep in mind that these are credits, not deductions - the amount of the credit is subtracted directly from the taxes you owe, unlike deductions, which are subtracted from your income to determine your tax liability.

If you're buying a new home that cuts energy use by at least 50 percent as compared to the model energy code, you will get a $2,000 tax credit. Note that there are many energy-saving strategies that can make your next home this efficient.

Fix up your current home with insulation or new windows or doors and you'll get a credit of 10 percent (up to $500). Buying high- efficiency air conditioners, water heaters or fans can get you a credit up to $300. Solar water-heating systems and solar electric systems are eligible for 30 percent credits (up to $2,000 each). There also are other products and building strategies eligible for the credits, including incentives specifically for manufactured homes, so check out this easy-to-follow summary of the incentives at aceee.org/press/Tax_incentive05.pdf, or get a summary of the various programs at http://fsec.ucf.edu/EPAct-05.htm.

At a time when gas prices at the pump are at record highs and we're getting ready to face higher heating bills this winter, making your home more energy-efficient is a better idea than ever - especially when the government is helping to pay for it.

Q: What should we be doing now before the cold weather gets here to make sure that our house is comfortable but still as energy- efficient as possible?

A: The U.S. Environmental Protection Agency offers some tips that can cut your energy bill by as much as 20 percent annually. Its winter season suggestions include making sure that your home's heating system is operating efficiently. Change the system's filter every month and also have a contractor do an annual tune-up to get the furnace ready for winter. You also should seal the cracks, openings and gaps in your home that allow unwanted air to flow into and out of the house. Not fixing these holes is like leaving a window wide open in the middle of winter while the furnace is trying to keep the house warm.

Use a programmable thermostat to keep the settings at the most efficient levels so that you don't waste the heat you're paying for. Check out the EPA's free Guide to Energy-Efficient Heating and Cooling at www.energystar.gov/hvacguide.

KEN SHEINKOPF IS A COMMUNICATIONS SPECIALIST FOR the American Solar Energy Society (www.ases.org). Send your energy questions to askken@ases.org.

Source: Augusta Chronicle, The

More News in this Category