Tax Credits for Renewable Energy Systems

There are many benefits to improving the energy efficiency of your home and/or owning renewable energy systems, and financial incentives make it more attractive to do now. Here is some information to get you started regarding solar hot water, wind and solar electric systems. There is much more information at http://www.cetonline.org/Renewables/renewable_resources.php

Massachusetts State Tax Credits

These credits for solar electric (photovoltaics), solar hot water and wind systems reduce the total amount of tax owed. 15% of the system cost after any grants are subtracted. Residential maximum tax credit is $1,000. If you don’t owe that much in taxes, the balance can be rolled over into the following year(s).

Federal Tax Credits

Energy Efficiency Improvements: Up to $500 homeowners energy tax credit for improving the energy efficiency of existing homes in 2009. Renewable Energy: An individual can take 30% credit of a solar electric, hot water or geothermal heat pump system cost after any grants and state tax credits are subtracted, up to a maximum $2,000 cap for each system. No maximum for photovoltaic systems after January 1, 2009. At least half of the energy used to heat the dwelling’s water must be from solar to be eligible, and does not apply to solar water heating for pools or hot tubs. Fuel cells qualify for a 30% tax credit up to $500 per .5 kW. Any excess credit may be carried forward to the succeeding tax year.

Credits are available for systems “placed in service” between 1/1/06 and 12/31/16.

If the installation is on a new home, the “placed in service” date is the certificate of occupancy date. Systems that have previously been installed are not eligible.

Commonwealth Solar Program for Residential PV

The program provides grants to  Massachusetts ratepayers for solar PV systems through a rebate process administered by the MA Renewable Energy Trust.   www.masstech.org/SOLAR/