A Look Into Energy Tax Credit
Cutting down the costs of your monthly electrical bills will help you lower your expenses. The price of energy is constantly fluctuating, and whenever it’s on the rise, you do your part to reduce your energy consumption. Usually, you’d choose to save electricity over comfort, and use your appliances sparingly. However, sacrificing comfort doesn't always work well, especially during the winter and summer months. Luckily, by equipping your home with various energy saving systems, you can improve your electrical consumption and lower its costs with an energy tax credit.
What is an Energy Tax Credit?
It is not cheap to install energy saving systems. Besides the price of the unit itself, property owners will need to rewire their whole home, and if the cost of saving energy does not encompass the cost of installation, then buying the systems may not worth it. However, after the introduction of the energy tax credit in the US, properties that have lost money from installing energy-saving systems now have a way of getting their money back. In a way, energy tax credit encourages homeowners to turn their homes into an Earth-friendly and energy efficient space. When people decide to equip their property with an eco-friendly improvement item or system, they can receive as much as 30% credit – which also includes the cost of installation.
The Nonbusiness Energy Property Credit is given when the equipment and materials meet the technical efficiency standards set by the Department of Energy. Unlike those in the Residential Credit, homeowners under this credit only get 10% tax credit on the cost of qualified energy efficiency improvements. This credit is limited to:
- Combined credit of $500 for tax years from 2006
- Maximum of $200 credit limit for windows since 2006
- Maximum credit for air circulating fans is $50
- $150 max credit for qualified furnaces and boilers
- $300 max credit for any energy efficient item in the building
There are also two kinds of Nonbusiness Energy Property Credit upgrades. First, the qualified energy efficiency improvements, include:
- Exterior doors
- Exterior windows and skylights
- Home insulation
- Certain roofing materials
And second, the residential energy property, includes:
- Electric heat pumps
- Central air conditioning systems
- Electric heat pump water heaters
- Oil furnaces that run on natural gas, propane, or oil
- Biomass fuel stoves
- Hot water boilers that are powered by natural gas, propane, or oil
- Advanced circulating fans for natural gas, propane or oil furnaces
Improving your property is a win-win situation for both you and the Earth. If you do decide to upgrade your home, contact Paradise Home Improvement at 844-707-9108. We offer various home energy performance systems and more, at an affordable cost. Our services are only available for properties situated in North and South Carolina, as well as Michigan and Minnesota.