Energy Tax Credits from the Federal Bailout

The $700 billion Federal bailout for the financial sector didn’t simply address banks, bad paper and worthless mortgages. The bailout bill as passed by Congress and signed by the president also had “sweeteners” added to make it more palatable to Senators and Representatives. One of those sweeteners was a group of tax credits for businesses that produce renewable energy and homeowners who conserve energy.

Businesses who produce fuel cells are one group that benefits from the new law. The law provides a tax credit of 30 percent to any person, group of people or company that purchases fuel cells. Since fuel cells don’t combust, using more fuel cells will provide a cleaner environment. Companies dealing with wind and solar power also get breaks with this new law.

Homeowners may benefit from the new law as well. If a taxpayer installs solar panels on his or her roof, they are eligible for a 30 percent tax credit. There is no limit on this perk, while in the past there was a maximum of $2,000.

Another tax credit encourages energy efficiency from current homeowners. A credit for making a home more efficient was extended for another year. The credit was set to expire. Those who purchase energy efficient appliances such as a biomass stove or an efficient water heater can qualify for the tax break. Contractors building new homes who use highly efficient systems for heating and cooling or hot water will also qualify for a credit of up to $2,000.

A manufacturer who makes energy efficient appliances, like refrigerators, dishwashers and clothes washers, also qualifies for tax credits.

The last group set to benefit under the new law are those who own a plug-in electric vehicle. Those owners may qualify for up to $7,500 in tax credit. This credit begins to phase out after more than 250,00 of the cars are sold in the U.S.

Comments

One Response to “Energy Tax Credits from the Federal Bailout”

  1. Anna on November 1st, 2008 10:39 pm

    This is a great post, I’ve added it to my delicious and I liked the video very much as well. I’m working on putting more information together on tax incentives for solar power installations so this is very useful.

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