From "Solar and wind energy credits" by Jeff Yago, from Backwoods Homes magazine.
Energy Improvement & Extension Act of 2008
The energy bill that was included in the October 2008 banking bailout bill lifts the $2,000 credit limit cap that was in the older 2005 Energy Bill. This means any solar system placed into operation after December 31, 2008 will have no Federal tax credit limit. For example, a high-end solar photovoltaic power system costing $50,000 would generate a $15,000 credit towards a homeowner’s Federal income tax liability.
This 2008 legislation also included a tax credit for wind-driven electric generators. However, the 30% Federal income tax credit for a wind system is limited to $1,000 per kW of installed wind generating capacity up to maximum of $4,000.
Both tax credits will remain in effect for eight years and will end on December 31, 2016. Although there are a few exceptions, this 30% solar tax credit is not dependent on where the money comes from to make the purchase, as long as you didn’t knock off a liquor store. You can purchase the system with cash, a loan, add to a mortgage, or max out your credit card; the tax credit is calculated on the total installed cost of the solar system including installation charges. For those taxpayers that only pay the alternative minimum tax (AMT), for the first time this solar tax credit will also apply to offset the alternative minimum tax.
If you do not owe enough Federal income tax in a given year to make use of the full credit amount, this bill allows carrying your solar tax credit forward for up to 20 years.
For more details on the Energy Improvement & Extension Act of 2008, read Jeff Yago's article Solar and wind energy credits
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For more information contact Jeff Yago at 804-457-9566
