DIY Solar Power Now Blog

Best DIY Starter Solar Project

A solar water heater is the perfect starter project because it does not take years to recoup the costs. It is also a small project that can introduce the homeowner to the benefits of solar energy. Rebates and tax breaks takes the sting out of the high cost. The federal credit is open to everyone. State and utility rebates, however, vary. A Passive Solar Hot Water System is affordable for warm climates and runs about $1,500. An Active Solar Hot Water System reduces heat loss and runs about $3,600. An Indirect Solar Hot Water System is the most efficient but also most expensive and run around a whopping $10,000!

On average, if you install a solar water heater, your water heating bills should drop 50%–80%. Also, because the sun is free, you’re protected from future fuel shortages and price hikes.

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Consumer Energy Tax Incentives - What the Economic Stabilization Bill Means to You

The recently passed Emergency Economic Stabilization Act of 2008 (P.L. 110-343) included, extended and/or amended many consumer tax incentives originally introduced in the Energy Policy Act of 2005 (EPACT). The bill also included tax incentives for businesses, utilities, and government.

About Tax Credits

A tax credit is generally more valuable than an equivalent tax deduction because a tax credit reduces tax dollar-for-dollar, while a deduction only removes a percentage of the tax that is owed. Consumers can itemize purchases on their federal income tax form, which will lower the total amount of tax they owe the government.

Fuel-efficient vehicles and energy-efficient appliances and products provide many benefits such as better gas mileage – meaning lower gasoline costs, fewer emissions, lower energy bills, increased indoor comfort, and reduced air pollution.

In addition to federal tax incentives, some consumers will also be eligible for utility or state rebates, as well as state tax incentives for energy-efficient homes, vehicles and equipment. Each state’s energy office web site may have more information on specific state tax information.

Below is a summary of many of the tax credits available to consumers. Please see the ENERGY STAR®’s Federal Tax Credits for Energy Efficiency for complete details.

Home Energy Efficiency Improvement Tax Credits

Consumers who purchase and install specific products, such as energy-efficient windows, insulation, doors, roofs, and heating and cooling equipment in the home can receive a tax credit of up to $500 for improvements “placed in service” starting January 1, 2009 through December 31, 2009. The ENERGY STAR® website has a complete summary of energy efficiency tax credits available to consumers.

Residential Renewable Energy Tax Credits

Consumers who install solar electric systems can receive a 30% tax credit for systems placed in service from January 1, 2006 through December 31, 2016; the previous tax credit cap of $2,000 no longer applies. In addition, consumers who install small wind systems can receive a tax credit up to $4,000. Geothermal heat pumps also qualify for tax credits up to $2,000.

Automobile Tax Credits

Individuals and businesses who buy or lease a new hybrid gas-electric car or truck are eligible for an income tax credit for vehicles “placed in service” after January 1, 2006 and purchased on or before December 31, 2010. The amount of the credit depends on the fuel economy, the weight of the vehicle, and whether the tax credit has been or is being phased out. Hybrid vehicles that use less gasoline than the average vehicle of similar weight and that meet an emissions standard qualify for the credit. There is a similar credit for alternative-fuel, diesel, and fuel-cell vehicles.

This tax credit will be phased out for each manufacturer once that company has sold 60,000 eligible vehicles. At that point, the tax credit for each company’s vehicles will be gradually reduced over the course of another year. Read the IRS’s Summary of the Credit for Qualified Hybrid Vehicles for information on the status of specific vehicle eligibility.

If individuals and businesses buy more than one vehicle, they are eligible to receive a tax credit for each. If a tax-exempt organization buys such a vehicle, the retailer is also eligible to receive another credit. Companies that buy heavy-duty hybrid trucks are also eligible for a larger tax credit.

Consumers who purchase plug-in electric drive vehicles can also receive a tax credit. The credit for passenger vehicles and light trucks ranges from $2,500 to $7,500 based on the tax code formula.

Taxpayers may claim the full amount of the allowable credit up to the end of the first calendar quarter after the quarter in which the total number of qualified plug-in electric drive vehicles sold in the U.S. exceeds 250,000.

Cost of Solar Installation Is Falling Fast…

The cost of adding solar to your roof fell 28 percent from 1998 to 2007, according to a Lawrence Berkeley National Laboratory study released last week. The average installation cost fell from $10.50 per watt in 1998 to $7.60 per watt in 2007, the study said.

The report, “Tracking the Sun,” attributes declining costs to effective state solar programs, such as California’s Solar Initiative. Most of the reductions have come in labor, marketing, overhead and permitting, not in the cost of the solar panels themselves, researchers said.
The lab studied 37,000 residential and nonresidential photovoltaic systems, representing 363 megawatts or 76 percent of all grid-connected solar installed through 2007, to come up with its findings.

Download full report at: http://eetd.lbl.gov/ea/ems/re-pubs.html