Five Federal Tax Credits for Energy Efficiency

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Federal Tax Credits for Energy Efficiency

This is a guest post by Rodger Black of

The environment will be receiving assistance from the United States federal government this year in the form of energy efficient tax credits. In particular, the government provides tax credits for specific energy efficient upgrades made by consumers for their home or transportation. Five federal tax credits for citizens to consider applying for are:

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Tax Credit for Residential Energy Upgrades

After homeowners improve the energy efficiency of their current residence, the credit will be issued once the proper form is received by the tax department. Moreover, homeowners may qualify for a maximum refund of $500 under the provision. Regrettably, the government decreased the credit to 10 percent from the prior 30 percent refund. Covered items include upgrades to a home’s insulation and windows along with air conditioning and heating units. However, homeowners should review the standard requirements for efficiency as the government will only extend the credit for certified Energy Star products.

The energy credit also has a lifetime cap of $500 and limits the amount that can be used for windows, which is $200. Fortunately, the energy credit may be claimed for labor costs.

Credit for Plug-in Electric Vehicles with Four Wheels

Vehicles that qualify under the government program must be purchased as a new vehicle and must have at least four wheels. Additionally, the vehicle is required to weigh 14,000 pounds or less. The plug-in standard requires the vehicle to use a battery with a minimum of four kilowatt hours. Also, the vehicle will need to have external plug-in access. Consumers can qualify for a minimum credit of $2,500 up to a maximum credit of $7,500, which is based upon the vehicle’s battery capability.

Credit for Plug-In Electric Vehicles with Two or Three Wheels

The government has added a provision for other types of plug-in vehicles, which include reduced-speed electric vehicles along with transportation devices that function with two or three wheels. Furthermore, the vehicle must achieve driving capability through an electric motor that is attached to a battery.

The government standards state that the battery must provide four kilowatt hours or greater for low speed vehicles while transportation devices with two or three wheels must have a battery capacity of 2.5 kilowatt hours or greater. Consumers who purchase an energy efficient vehicle that falls under these guidelines may qualify for a 10 percent credit with a cap of $2,500.

Tax Credits for Small Wind Turbines

Homeowners who install a wind turbine for their primary or secondary home will qualify for a 30 percent tax credit with no cap. The credit will be offered until December 31, 2016. Additionally, the benefits of a wind turbine include the device’s ability to gather the energy needed for a home from the wind. Furthermore, the turbine will convert the wind energy to electricity for a home as the mechanism is designed for residential compatibility. An additional benefit of the tax credit is that it will cover the cost of labor. However, the wind turbine must have a nameplate capability of 100 kilowatts or less.

Tax Credits for Solar Energy Systems

An energy efficiency tax credit will be sent to consumers who install a certified solar energy system for their primary or secondary home. Also, the credit is 30 percent of the system cost including labor, and consumers have until December 31, 2016 to install the system.

When consumers install solar water heating systems, the sun must provide the energy for at least half of the energy generated. Also, in order for a photovoltaic system to be tax credit certified, the system must generate electricity for the entire residence. Moreover, the system will need to be reviewed for fire and electrical safety.

Energy efficient aware consumers can help the environment and their finances by upgrading their homes, appliances and vehicles to federal government standards. Moreover, friends and neighbors may be inspired to upgrade their own homes. At this time, the United States government is validating the need for energy efficiency, and consumers can do their part to encourage this continued support.

This post was contributed by a guest writer. If you’d like to guest post for Naturally Earth Friendly please check out our Become An Author page for details on how YOU can share your tips with our readers.

About Rodger Black

Rodger Black is a tax consultant and occasionally blogs for, a site where you can learn how to claim tax back using their tax rebate calculator!

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