It's Easy Being Green

Home renovations might look more green in due time thanks in part to the latest economic stimulus plan put in motion by President Obama.  The economic rescue package passed by the Bush administration last Fall renewed the IRS Section 25C tax credit, which credited homeowners 10% of the purchase costs of green renovations with a $500 lifetime cap.  Contractors claimed it wasn’t enough to motivate homeowners to sign contracts and pursue green renovations.

Obama’s latest economic stimulus plan sweetened the tax credit though so homeowners will now have more incentive to make their house more energy efficient and environmentally friendly.  The credit has essentially been trippled to 30% of the purchase cost with a lifetime cap of $1,500.  Some renovations that would qualify for the credits include beefing up your insulation, buying new and more efficient furnaces, air conditioners and heat pumps, installing new roofing and energy efficient windows and doors.  Reportedly the list of qualified items is also about to expand so more green renovations may qualify for a credit.  You have until 2010 to apply for the credits.

For more information on the 25C tax credit check out this link.

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A $31 Million package of incentives and tax credits for alternative and green energy sources has passed the U.S. Senate’s Finance Committee.  The package is expected to be ready for President Obama to sign by mid-February.

The packages would give homeowners tax credits for investing in alternative energy sources like wind or solar and for making their homes more energy efficient.  Alternative energy companies can also carry their current tax credits for an additional five years.

I think this is fantastic and a good way to encourage people to start making the move to alternative energy and maximum efficiency.  Unfortunately I feel like unless these packages were to be extended for several years, it’s not going to do much right now.  The economy is in such poor shape that who, aside from the wealthy (once again), have the money to invest in solar panels and wind turbines right now?

I don’t think the answer will reveal very many people willing to make the investment in these rocky times even with as much as it will pay off in the long run.  I hope our government realizes that this is a vital move to keep alive for several years and not just one tax season.  Do green tax breaks like this one do enough to encourage you to make the move to alternative energy sources?  Share your thoughts and opinions by posting a comment below!

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As noted in the report, solar power has been expanding rapidly in the past eight years, growing at an average pace of 40 percent per year. The cost per kilowatt-hour of solar photovoltaic systems has also been dropping, while electricity generated from fossil fuels is becoming more expensive. As a result, the report projects that solar power will reach cost parity with conventional power sources in many U.S. markets by 2015. But to reach the 10 percent goal, solar photovoltaic companies will also need to streamline installations and make solar power a “plug-and-play” technology, that is, it must be simple and straightforward to buy the components of the system, connect them together, and connect the system to the power grid.

The report also places some of the responsibility with electric utilities, which will need to take advantage of the benefits of solar power, incorporate it into future “smart grid” technologies, and create new business models for building solar power capacity. The report also calls for establishing long-term extensions of today’s investment and production tax credits, creating open standards for connecting solar power systems to the grid, and giving utilities the ability to include solar power in their rate base. See the Clean Edge press release and the full report.

Reprinted from EERE Network News, a free newsletter of the U.S. Department of Energy.

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