The energy you reap from the earth, sun or wind may be free, but the equipment needed to produce renewable energy for your home typically costs more than traditional technology based on fossil fuels. New federal tax credits are available to people who install qualifying renewable-energy technologies in their primary residence, rental home or vacation property. They are available for equipment installed (or new homes purchased) this month through 2016.
What are the credits?
Here is a breakdown of energy type, amount of credit, and caps:
- Geothermal heat pump, 30 percent of the cost, $2,000.
- Solar water heating system, 30 percent of the cost, $2,000.
- Photovoltaic electricity, 30 percent of the cost, not capped.
- Small wind-energy systems, 30 percent of the cost (up to $500 per half kilowatt of capacity), $4,000.
- Fuel cells, 30 percent of the cost (must have efficiency of at least 30 percent and capacity of at least 0.5 kilowatt), $1,500 per half kilowatt of power.
Sources: Environmental Protection Agency and Energy Department's Energy Star program