Stimulus Bill Offers Incentives to Go Green

Brett Freeman

The recently enacted stimulus bill, formally known as the American Recovery and Reinvestment Act, contains unprecedented incentives in the form of tax credits for people who invest in energy efficient upgrades for their homes. If you have been putting off green renovations to your home, it's worth it to stop stalling. The incentives contained in the stimulus bill are potentially worth thousands of dollars for those who "go green."

The Biggest Green Incentives
Given that one of the main purposes of the stimulus bill is to spur consumer spending, it's not surprising that the biggest incentives are for relatively expensive items, but if you're willing to spend, you can realize substantial savings. These big ticket items include solar panels that generate electricity for your residence (panels that charge individual items are not eligible), geothermal heat pumps, solar water heaters, fuel cells, and residential small wind energy systems such as wind turbines or windmills.
Those who install these types of upgrades, either in an existing or a new home, are eligible for a tax credit of 30 percent of the cost and, unlike the other tax credits offered in the bill, there is no cap. Given that these items can cost thousands or even tens of thousands of dollars, having Uncle Sam pick up nearly a third of the tab is a pretty sweet deal.

Other "Creditable" Improvements
The stimulus bill also extends and expands some tax credits that had been tucked into last year's bank bailout bill. The tax credit had been for 10 percent of the cost of certain energy efficient home improvements, up to a maximum total credit of $500 for all improvements, and was set to expire at the end of the year. The credit has now been bumped up to 30 percent, and the cap raised to $1500 total for improvements made in 2009 and 2010 (that is, a $1500 cap for improvements made in 2009 and 2010 combined).

Eligible upgrades and items include energy efficient windows and doors, metal and asphalt roofs, insulation, HVAC systems, non-solar water heaters (solar water heaters aren't subject to the $1500 cap), and biomass stoves. To be eligible for the tax credit, these improvements must be put into service in 2009 or 2010, and they only apply to your primary residence. The credit is also only applicable to improvements made to an existing house, not for new construction.

With such dramatic incentives to invest in green renovations, there's no excuse to keep putting them off. The time is now.

About the Author
Brett Freeman is a freelance journalist. He also owns a landscaping and irrigation company in North Carolina. Previously he has worked as a beat reporter, a teacher, and for a home improvement company, and he used to own a bar/live music venue.

About the Author
Brett Freeman is a freelance journalist. He also owns a landscaping and irrigation company in North Carolina. Previously he has worked as a beat reporter, a teacher, and for a home improvement company, and he used to own a bar/live music venue.


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