Energy-saving strategies can lower your environmental impact and electricity bill, but saving energy can also put you in a position to cash in on government rebates. Rebates serve as an incentive to stay committed to your energy plan. The government even provides tax rebates for energy-efficient renovations.
Home improvements that fall under this tax credit include new roofing, windows and HVAC systems. Combine rebates by finding a low-cost provider through an energy provider service, and you could save up to thousands of dollars a year while helping the environment.
You have two options for electric vehicle tax credits. One covers newly purchased plug-in vehicles that have to meet a few qualifying criteria. The other one gives you a credit for converting an existing vehicle to an electrical power system. Only 1 percent of motor vehicle sales in the U.S. were electric cars in the beginning of 2013, reports ABC News. Both federal and state incentives are in place to increase the adoption numbers of the car. The federal credit is up to $7,500, while some states, such as California, offer additional tax credits. The IRS does require you to purchase the car new. The upper limit of the tax credit will decrease once the manufacturer of your vehicle has moved approximately 200,000 vehicles. In the meantime, it's a great way to get a deal on an environmentally conscious car you might not have pursued otherwise.
Residential-sized alternative energy source installations will also provide you with a few tax advantages. Renewable energy sources include geothermal heat pumps, biomass stoves, residential wind turbines, and solar energy panels. The amount of the rebate depends on the product category, and whether it meets all of the eligibility requirements. For example, a biomass stove, such as a wood burning stove, requires the thermal efficiency to be rated at 75 percent. The tax credit amount for this is a flat $300, explains Energystar.gov.
The Non-Business Energy Efficiency credit provides 10 percent of the actual costs associated with adding energy-efficient home improvements to your primary residence, according to the IRS. This tax credit has a lifetime cap of $500. If you're adding new windows to your home to increase the insulation of your house and natural heating, you can only use $200 for windows, Irs.gov reports.
The Residential Energy Efficient Property Credit covers various alternative energy equipment. This credit applies to homes that aren't your main residence. If you rent out a house as an income property, or you have a second home, you can also take advantage of the lifetime credit. Thirty percent of the cost of equipment, such as solar water heaters and solar panels, are covered under this credit.
About the author: Peggy Smith is a sustainability specialist from Arizona who writes about solar energy and green living.