Thursday, November 5, 2009

Tax Breaks For Solar Power

As with any tax incentive you come across, be sure to read it first. Some tax incentives only apply to commercial solar projects. What you want is tax information for residential solar projects.

Don't forget to talk with the federal government, and ask them for form 5695. This will allow you to tell them your costs for installing a residential solar power system. If you live in certain states or countries, you may get a 30 percent tax credit for your costs, up to a total of $1,500 for existing homes. This is on offer all the way through 2010 for major home improvements as well. You could also claim solar hot water heater system credit, as long as the system is found in your residential solar power plans. The most of a credit amount you can get is $2,000.

Recently, the $2,000 cap was removed for solar hot water heaters. Consumers who use solar hot water heating can claim the full thirty percent of the cost of the system as a tax credit. This unlimited amount also applies to solar panels systems as long as they comply with electrical and fire safety codes.

Your solar system and hardware costs qualify for this tax credit. The cost of your residential solar kits including the equipment and the hardware can be claimed for. Those DIY residential solar energy system builders can get more benefits as the costs are less if you know where to shop. This way you get more benefits from the tax credit system this way.

All over America each state has its own tax credits and incentives for those residents who choose to invest in their own solar power projects. You benefit from taking a look at a great online solar power tax credits database that catalogs renewable energy source incentives all over America. Called DSIRE (Database for State Incentives for Renewables and Efficiency), you can find it at www.dsireusa.org.

Looking at California as an example, the city of Sacramento implemented a residential energy efficiency loan program to enable district residents to defer the cost for the home improvements involving renewable energy sources. If you own your own property, you can receive one of these loans at the reasonable interest rate of just 8.5 percent.

It doesn't hurt to look and see what your state and federal government is willing to do for you when it comes to saving the planet. Use tax incentives to turn your residential solar power system into an affordable proposition.

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