Hello, i’m jeremy from turbotax with important news on how you can reduce your tax bill and protect the environment at the same time. Have you installed solar powered equipment in your home this year? Or are you considering it? If so, the federal government will reward your environmentally conscious home improvements with a tax credit equal to 30 percent of your purchase and installation costs.
There is no maximum on the amount of credit you can claim. Essentially, the credit works like this. If you spend 10000 dollars to buy and install solar panels on your roof, your credit will equal 3000 dollars. If at the end of the year, you owe 5000 dollars in taxes, the credit reduces your tax liability to 2000 dollars.
If you haven’t purchased the solar powered equipment yet, don’t worry. You have until 2016 to do so. There is, however, one notable limitation to the credit. It is only available for improvements that you make to your main home which is generally your principle residence where you live for most of the year. You can also increase your tax savings by claiming similar credits for energy efficiency improvements.
A maximum 1500 dollar tax credit that is equal to 30 percent of your cost to purchase energy efficient equipment is also available for items such as wood stoves or energy efficient water heaters. But before you make these purchases, be sure that the packaging has the Energy Star label. Otherwise, it will not qualify for the credit. For more information about this and other tax topics, visit TurboTax .
What Is a Renewable Energy Certificate
Have you ever wondered, when you turn on your lights, where that electricity is coming from? In the United States, most electricity comes from coal, natural gas, and nuclear; and some renewable sources, like hydropower, wind, and solar. No matter where electricity is generated, it is mixed together on the shared electricity grid. When you turn on your lights or TV, you pull some of that electricity out. Once electricity is put on the grid, there is no way to know where it came from or how.
It was generated, all electricity is the same. if you want to green your power, though, you can do that with renewable energy certificates. These certificates are created each time one megawatthour of renewable energy is generated and put on the grid, about what an average home uses in a month. The wind turbine spins, or the solar panel collects sunlight, and when enough electricity is generated, a certificate is created. This certificate proves that one megawatt hour of renewable energy was generated, and it embodies all the green, environmental.
Benefits of that megawatthourincluding lower amounts of smogcausing pollution and greenhouse gases, like carbon dioxide. All of these benefits are included in the certificate. Whoever owns the certificate owns that megawatthour of renewable energy. Certificates are used by states and the federal government to track use of renewable energy. Theyre also used by utility green power programs to track which customers receive green power, because certificates provide the only means to know that one megawatt hour.
Of renewable energy was generated on their behalf. when an individual or business buys a certificate, they are buying renewable energy, and can claim all the environmental benefits of that megawatthour. Certificates also allow wind and solar developers to build wherever the resources are, knowing they will be supported by customers from across the country. Renewable energy certificates work because cleaner air and water are worth something extra to all of us, and certificates allow us to buy these environmental benefits no.