Federal Tax Credit Incentive

For more information, visit the Residential Renewable Energy Tax Credit information on www.dsireusa.org.

Brief Summary

Summary Description

A taxpayer may claim a credit of 30% of qualified expenditures for a system that serves a dwelling unit located in the United States and used as a residence by the taxpayer. Expenditures with respect to the equipment are treated as made when the installation is completed. If the installation is on a new home, the "placed in service" date is the date of occupancy by the homeowner. Expenditures include labor costs for onsite preparation, assembly or original system installation, and for piping or wiring to interconnect a system to the home. If the federal tax credit exceeds tax liability, the excess amount may be carried forward to the succeeding taxable year. The excess credit can be carried forward until 2016, but it is unclear whether the unused tax credit can be carried forward after then. The maximum allowable credit, equipment requirements and other details vary by technology, as outlined below.

Small wind-energy property

• There is no maximum credit for systems placed in service after 2008. The maximum credit is $500 per half kilowatt, not to exceed $4,000, for systems placed in service in 2008.
• Systems must be placed in service on or after January 1, 2008, and on or before December 31, 2016.
• The home served by the system does not have to be the taxpayer’s principal residence.

For more information, visit the Residential Renewable Energy Tax Credit information on www.dsireusa.org.