On a deep energy retrofit like ours, the clock is always ticking. Not only was it ticking, recently the alarm went off too: I have known for a number of years that I had till this year (2016) to install renewable energy components and claim the juicy 30% Residential Renewable Energy Tax Credit.
We are interested in a photovoltaic and solar hot water system. Knowing that the time to claim the tax credit was running out, I took the first steps of organizing the project and was surprised – pleasantly surprised:
The tax credit has been extended. With limitations, but still, it has been extended.
The government actually got something done! Wouldn’t you think that’s BIG news? I can’t believe that I missed this.
“Note: The Consolidated Appropriations Act, signed in December 2015, extended the expiration date for PV and solar thermal technologies, and introduced a gradual step down in the credit value for these technologies. The credit for all other technologies will expire at the end of 2016.”
The good news: The Residential Renewable Energy Tax Credit for photo voltaic and solar hot water system was extended until 01-01-2022.
The bad news: The Residential Renewable Energy Tax Credit for fuel cells, wind turbines and geothermal heat pumps is still running out at the end of this year (2016).
“A taxpayer may claim a credit of 30% of qualified expenditures for a system that serves a dwelling unit located in the United States that is owned and used as a residence by the taxpayer. Expenditures with respect to the equipment are treated as made when the installation is completed. If the installation is at a new home, the “placed in service” date is the date of occupancy by the homeowner. Expenditures include labor costs for on-site preparation, assembly or original system installation, and for piping or wiring to interconnect a system to the home. If the federal tax credit exceeds tax liability, the excess amount may be carried forward to the succeeding taxable year. The maximum allowable credit, equipment requirements and other details vary by technology, as outlined below.”
But – the clock is still ticking. Here is more fine print: If you would like to claim 30% of the Residential Renewable Energy Tax Credit on photovoltaic and solar hot water, you have until the end of 2019. From 12-31-2019 till 01-01-2021 the tax credit for systems placed in service is reduced to 26%. And for systems placed in service between 12-31-2020 and 01-01-2022, the credit is further reduced to 22%. Once you’ve missed this last deadline, you are left hoping for another extension.
You can access details about the Residential Renewable Energy Tax Credit here: