High Temperatures and High Utility Bills Making You Consider “Going Green”?

Residential Energy Tax Credits for 2012

Are your high utility rates making you think about âہ“going green” and making your home more energy efficient?  This is the perfect time to do so especially if you want to take advantage of the residential energy tax credits available to homeowners.

The Residential Energy Efficient Property Credit is available to individual taxpayers to help pay for qualified energy equipment.  This equipment includes solar hot water heaters, solar electricity equipment and residential wind turbine.  Your home must be located in the United States.

Wind turbines, energy systems, and geothermal pumps can be installed in both principal residences and second homes (existing homes and new construction), but not rentals.  The fuel cell qualifies only when it is installed in your principal residence.

The tax credit is 30% of the cost of the qualified property with no cap on the amount of credit available, except for the fuel cell.  Labor costs can be included when figuring the credit.  Any unused portion of this credit can be carried forward.  Not all energy-efficient improvements qualify so make sure you have the tax credit certification statement, which can be found on the manufacturer’s website or with the product packaging.

The qualifications for the tax credit are as follows:

Geothermal heat pumps– must meet the requirements of the ENERGY STAR program that are in effect at the time of the expenditure.

Small residential wind turbines– must have a nameplate capacity of no more than 100 kilowatts.

Solar water heaters– at least half of the energy generated by the âہ“qualifying property” must come from the sun.  It must be certified by the Solar Rating and Certification Corporation or a comparable entity endorsed by the government.  It is not available for the expenses of the swimming pools and hot tubs.  The water must be used in the dwelling.  They must meet all fire and electrical code requirements.

Solar panels( photovoltaic systems)-  must provide electricity for the residence and meet all code requirements.

Fuel cell– efficiency of at least 30% and have a capacity of 0.5 kw.

Give us a call or email us today for help sorting out the tax credits available for your “green” home improvements.


David W Huff, CPA, PFS, MS is a partner at Person CPA Group. He provides clients with tax preparation and consulting services, accounting services, retirement plan and benefit consulting, accounting software technical support and training, and management advisory services. His specialty is helping new businesses organize their operations to maximize tax savings and move quickly from start-up to profitability.  You can reach David by email at: david@personhuffcpa.com