Reduce your utility bill and receive a tax credit

Reduce your utility bill and receive a tax credit


The “clean energy economy” is here and growing day by day; thanks in part to the Investment Tax Credit for renewable energy that has stimulated job creation, while encouraging home and business owners to install and create clean power by using solar.

Established by the Energy Policy Act of 2005 and extended by The Energy Improvement and Extension Act of 2008, many federal incentives apply to renewable technologies. The federal tax credits have currently been extended to 2016.

In order to qualify for the following systems and receive the federal tax credit in 2011, the system must be installed by Dec. 31, 2011.

• Solar Thermal (Hot Water) Systems receive a 30% tax credit which applies to solar thermal system expenditures with no cap. Products must be certified by Solar Rating and Certification Corporation.

• Residential Solar Photovoltaic (PV) Systems receive a 30% tax credit which applies to PV system expenditures with no cap. Systems must be installed by a licensed contractor.

• Commercial Solar PV Systems receive a 30% Treasury grant instead of a tax credit for new installations. Business owners may receive a grant from the U.S. Treasury Department instead of taking the Production Tax Credit. Receive a grant of 30% of the cost of the system in approximately 60 days as a direct deposit. This grant can only be taken for systems where construction begins before Dec. 31.

• Commercial Solar PV Systems Bonus Depreciation 2008-2012 plus Modified Accelerated Cost Recovery System (MACRS) receive 100% bonus depreciation in 2011, 50% in 2012. MACRS businesses may recover investment in certain property through depreciation schedule; renewable energy technologies are classified as a five-year property.

What is the difference between a tax deduction and a tax credit? A tax deduction is subtracted from income before total tax liability is computed. Tax credit is subtracted directly from the total tax liability. The tax credit is more advantageous to the taxpayer. Example: Tax credit of $1,000 for someone in the 28% tax bracket is equivalent to a tax deduction of about $3,500. Consult your tax advisor for details.

Solar jobs have been created in part because the incentives available to you have increased the demand for solar electricity products and services. According to a recent study by Brookings Institution the clean energy economy employs some 2.7 million workers across the industry in sectors such as solar energy and green construction. Solar photovoltaic installations have grown at a compounded annual growth rate of 61% between 2006 and 2009.

Are you ready to earn your 2011 federal tax credit? Call Atlasta Solar Center and talk with a professional about the incentives and rebates available until the end of this year. Happy holidays!