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2011 Rebates Update: Wind & Geothermal Systems
Posted on 08. Feb, 2011 by GMS Editor in Newsflash, ShowOnLatestPanel
Small Wind Systems
What are the tax incentives for on-site wind systems?
On October 3, 2008, the Emergency Economic Stabilization Act of 2008, H.R. 1424, was enacted into law and includes a new federal-level investment tax credit to help consumers purchase small wind turbines for home, farm, or business use. Owners of small wind systems with 100 kilowatts (kW) of capacity and less can receive a credit for 30% of the total installed cost of the system. The credit will be available for equipment installed through December 31, 2016. This legislation marks the first federal incentive for small wind systems since 1985. The incentive was further expanded through the American Recovery and Reinvestment Tax Act of 2009, which removed the financial cap that had been present in the 2008 legislation..
Who is eligible for the tax incentives?
Home-owners, farmers, and businesses that install wind turbines with not more than 100 kilowatts of nameplate capacity are eligible for the incentive.
What do I have to do to qualify for these incentives?
To qualify, tax payers will need to have evidence regarding:
- the cost of the system,
- when it was placed in service,
- whether the system meets the qualifying criteria discussed above.
Taxpayers installing on-site wind systems at their residence should use the IRS Residential Energy Efficient Property Form 5695.
Geothermal Heat Pumps
What are the tax incentives for geothermal heat pumps?
As part of the Emergency Economic Stabilization Act of 2008, an incentive was added for geothermal heat pump property. The incentive for businesses is available from Oct. 3, 2008 through December 31, 2016, and for residential installations the incentive is available for units placed in service starting January 1, 2008 until December 31, 2016. Qualified geothermal heat pump property refers to any equipment which uses the ground or ground water as a thermal energy source to heat the taxpayer’s residence, or as a thermal energy sink to cool the residence. The unit must meet the requirements of the Energy Star program which are in effect when the heat pump is purchased.
The residential incentive covers 30% of the expenditures in the year the incentive is taken, up to a cap of $2,000 if the property was installed prior to January 1, 2009. Qualifying geothermal heat pump property installed after December 31, 2008 is eligible for 30% of the installed cost without a cap, as provided under the American Recovery and Reinvestment Tax Act of 2009. The incentive is available for taxpayers installing qualifying equipment at their primary residence or a second home, but not for a rental property.
What do I have to do to qualify for these incentives?
To qualify, tax payers will need to have evidence regarding:
- the cost of the system,
- when it was placed in service,
- whether the system meets the qualifying criteria discussed above.
Taxpayers installing geothermal heat pump systems at their residence should use IRS Form 5695 for the Residential Energy Efficient Property incentive.
Learn more at The Tax Incentives Assistance Project.
