Solar Energy Credits

Solar Energy Credits

how does the federal renewables tax credit work?

I saw that the energy efficiency tax credit only reduces your tax liability but does not put any money back in your pocket. I am curious if I put a solar system on my house if the process and outcome is the same. I can’t get my accountant to call me back and I am not finding the specific publication that explains the process in more detail online.

Residential Energy Efficient Property Credit (Section 1122): This nonrefundable energy tax credit will help individual taxpayers pay for qualified residential alternative energy equipment, such as solar hot water heaters, geothermal heat pumps and wind turbines. The new law removes some of the previously imposed maximum amounts and allows for a credit equal to 30 percent of the cost of qualified property. See Notice 2009-41.,,id=206875,00.html

On-Site Renewables Tax Incentives
Solar Energy Systems – Small Wind Systems – Geothermal Heat Pumps
Solar Energy Systems
What are the tax incentives for solar systems?
Homeowners are eligible for tax credits for qualified solar water heating and photovoltaic systems. Solar water heating systems produce hot water, photovoltaic systems produce electricity (including solar fans). The credits are available for systems “placed in service” at any dwelling unit, not necessarily the primary residence, between January 1, 2006 and December 31, 2016.

Note: This is a basic guide to the credit. For more detailed information, go to and download the Guide to Federal Tax Incentives for Solar Energy, or SEIA’s FAQs regarding the new legislation.

How do the incentives work?

Alternative Minimum Tax and the Residential Solar Tax Credit

According to SEIA, the new legislation passed in October of 2008 “allows individual taxpayers to use the credit to offset AMT liability, and to carry unused credits forward to the next succeeding taxable year.”

What do I have to do to qualify for these incentives?
To qualify, tax payers will need to have evidence regarding:

Hope that you find the above enclosed information useful. 10/01/2011

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