Solar power qualifies for a tax deduction.
The current and likely future trend of climbing oil prices is causing many consumers to ponder alternative heating systems. In addition, the federal government wishes to reduce global emissions and speed up the process to a clean energy economy by offering alternative heating tax deductions. The 2009 stimulus package has several tax write-offs that make "green" heating a much cheaper option for your home.
History
Oil crises are not a new phenomenon. The OAPEC oil embargo during 1973 created a severe shortage of oil in the United States and drastically rose petroleum prices. In response to rising energy prices, Congress passed The Energy Tax Act of 1978, which created the first tax deduction for alternative home energy installations, according to a paper by the non-partisan Congressional Research Service. While Congress renewed the 1978 energy bill throughout the 1980s, dropping oil prices waned the urgency of alternative heating and tax deductions for it in the 1990s.
Function
Alternative heating tax deductions not only boost the infant green energy sectors, the government believes they will curb the effects of global warming that the Environmental Protection Agency believes will occur during the 21st century. Current heating methods use fossil fuels which burn greenhouse gases into the atmosphere. These gases will warm the Earth too fast and cause potential environmental and health damage.
Current Deductions
Although the energy tax deductions in the 1978 Energy Act have since passed, the 2009 stimulus bill saw a renewal in awarding incentives to those who choose a clean heating fuel. According to the Department of Energy's tax break page, the 2009 stimulus includes a provision to allow consumers a tax credit worth 30 percent of the cost of installing an alternative energy system. You may also take a 30 percent deduction, up to $1,500 for the cost of home improvements to improve energy efficiency.
Effects
The effects of tax breaks for those who use alternative heating seem to have a positive boost to green energy industries. A CNN report with Ron Stimmel, an American Wind Energy Association advocate, claims that the 2009 stimulus tax credits will boost the small wind turbine market by 40 percent to 50 percent, about the same as the boost to the solar energy market three years earlier in a similar energy bill.
Considerations
If you are planning on taking advantage of current alternative heating tax deductions you may want to consider expediting your purchase. The Home Energy Efficiency Improvement Tax Credit lasts from Jan. 1, 2009 to Dec. 31, 2010. Anyone claiming the Residential Renewable Energy Tax Credi must install the unit before Dec 31, 2016.
Tags: 2009 stimulus, alternative heating, alternative heating deductions, heating deductions, energy bill
