Federal Tax Credits for Solar Power Improvements

I'm finally done studying for the Virginia Bar Exam! There is no way around the fact that studying for any bar exam is a miserable experience. I don't care how smart, organized, type-A you are, the bar exam will consume your life for two long, torturous months. Now I have a chance to get back to thinking green!

I listened to President Obama appoint Mr. Ben Bernanke for a second term as Chairman of the Federal Reserve. In his speech, the President touched upon a reoccurring theme: the United States should become a leader in renewable energy.

This point struck me only because earlier in the day I read the following article in the New York Times by Keith Bradsher, "China Racing Ahead of the U.S. in the Drive to Go Solar." The article examined China's emergence as THE world leader in developing solar power. Generous government subsidies, cheap labor, and state-backed loans are all contributing factors to its rapid development.

Photo Credit: Virginia Tech Solar House

How much solar power does the United States currently use?

According to the Department of Energy, the United States used 1% of its energy needs from solar energy in 2008. In addition, the United States used 7% of its energy needs from renewable energy combined, which includes solar, hydroelectric, geothermal, biomass, and wind energy.

How can the average homeowner encourage solar power use?

Take advantage of generous tax credits! Homeowners may claim a 30% tax credit for the cost of improvements for solar water heating and photovoltaic systems. These federal tax credits have no upper limit and are available through 2016 for existing homes and new construction.

The Department of Energy spells out the specific requirements on their website. For example, the solar energy systems must be placed in service before December 31, 2016. In addition, you'll want to make sure your local community allows for solar panel use - not every locality does. The best way to find out is to call your local building office. You will likely need a building permit for installation.

Uncle Sam wants to help you go green. Take advantage of the 30% tax credit for solar power improvements to your home.