The renewable-energy tax credit will reduce your federal income tax dollar for dollar by up to 30% of the cost (including installation) of a geothermal heat pump, solar electric system or small wind turbine. The credit expires next year. You must buy the system for your primary residence or second home, and it must be installed by December 31, 2016.
See Our Slide Show: 6 Home Projects That Save Time and Money
Congress may revive a tax credit that expired in 2014 equal to 10% of the cost of energy-efficient home improvements—up to a lifetime maximum of $500. Eligible projects in the past included insulation, heating and cooling equipment, and replacement windows and doors. If you complete a project in 2015 or are thinking of one for 2016, check www.energystar.gov for updates.
Your state or utilities may offer rebates for projects that improve your home’s energy efficiency. To see what’s available, check the Database of State Incentives for Renewables and Efficiency. For example, customers of Tampa Electric, in Florida, can recoup $50 for ductwork sealing, $275 to $400 for installation of an air-source heat pump, $200 to $350 for ceiling insulation, 31 cents per square foot for wall insulation, and $2.65 per square foot for replacement windows. Customers of Southern California Gas can choose a Home Upgrade program with a rebate of up to $6,500.
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Funding for incentive programs may be limited. Contact your state or utility to verify availability, requirements for eligibility and deadlines.
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