Understanding Renewable Energy Federal Tax Incentives – Dallas

While many state governments may be slow to adopt incentives for business and consumer-based renewable energy solutions, the federal government has provided a number of new incentives.

These incentives are designed to encourage homeowners, business owners and even utility companies to install renewable energy solutions.

The Emergency Economic Stabilization Act of 2008 provides incentives designed to promote sustainable, renewable energy solutions.  Here is a brief breakdown of what the Act covers:

Long-term Extension of Business Solar Investment Tax Credit

This portion of the Act provides 30% investment tax credit through 2016 for businesses that install solar arrays.  In plain terms, this part ensures that businesses and utilities receive a tax credit equivalent to 30% of the initial installation cost of the solar energy solution on the next tax filing.  This amount will be credited to the current year's taxes (the year of installation).

Long-term Extension and Modification of the Residential Solar Investment Tax Credit

This portion of the Act provides 30% renewable energy federal tax incentives to consumers who install solar energy solutions in their homes or rental properties.  The total amount of the credit, as in the case of the business credit, will be 30% of the initial solar energy solution investment cost.

New Clean Renewable Energy Bonds (“CREBs”)

This part of the Act authorizes $800 million in CREBs to offset the cost of financing renewable energy generation facilities. Solar, geothermal, hydropower and wind generators are covered under these bonds. The total amount of the bonds will be broken into thirds for use in different areas, such as state and local projects, public utilities and electric coops.

In addition, several other sections of the Act make provision for assistance in research and development, conservation bonds and energy efficient building practices. These incentives provide fantastic economic assistance for homeowners and business owners to install and utilize renewable energy sources.

Renewable energy federal tax incentives do not provide immediate cash, it should be noted.  Each incentive only provides a tax credit, which offsets your total taxes owed for the year in question.  However, one beneficial aspect of the Act is that any unused portion of the credit can be rolled over to the following year, thus ensuring you of long-lasting tax benefits.

It should be noted that, renewable energy federal tax incentives do not provide immediate cash incentives. Each incentive provides a tax credit, which offsets your total taxes owed for the year in which the installation occured.  

If these renewable energy federal tax incentives are not enough to help you decide to choose renewable energy, consider the other benefits provided by the technology.  You are able to attain clean, renewable electricity, without concerning yourself with the annual increase of energy costs provided by your current electric service provider. You can also help improve the environment by reducing the size of your corbon footprint through reducing your dependency on electricity generated through the burning of fossil fuels.  Combined, these benefits and incentives should be enough to make any business or homeowner consider this technology.