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Government Solar Energy Tax Credits: Too Good to Be True?

July 6, 2011

You may have heard some recent buzz about government incentive programs to reward homeowners for making their residences more energy efficient. You might be skeptical as to just how “rewarding” any such program could really be. However, the Federal Tax Credit for Energy Efficiency is actually a rather generous program that can help homeowners deflect a portion of the cost of installing a solar energy system by up to 30% with no upper limit on the credit.

Like most good things, however, there are a few catches to the deal. We believe the benefits far outweigh the drawbacks, but we would be remiss not to inform you of what those drawbacks are. Here are some of the limitations and concerns of the credit:

  • You have to spend money to claim the credit. It isn’t possible to simply apply for the credit and then use that money to make the installation. You must put down the investment, and solar energy systems get very expensive very quickly.
  • It has to be your primary residence. If you are making improvements on a rental home or a vacation home, you’re pretty much on your own financially.
  • In most cases, you must hire a professional solar panel installer. If your system is improperly installed it will not work efficiently, thereby defeating the purpose of the program. This isn’t a big problem for most people, however, since most will recognize the value of a professional installation.

From → Solar

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