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Tax Credits for Green Remodeling: What Qualifies?

Tax Credits for Green Remodeling: What Qualifies?

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January 19, 2010

When it's time to remodel your home, why not go green? There has never been a better time to turn to eco-friendly appliances and materials! Not only does green remodeling help the environment, certain home improvements can lead to a nice tax credit or deduction--and that puts more green in your bank account.

Which appliances and improvements qualify for tax credits?

  1. Heating, Ventilating, and Air Conditioning Units. Some HVAC products, such as air source heat pumps, central air conditioning, natural gas or propane furnaces, oil furnaces, boilers, and advanced main air circulating fans can qualify for the tax credit. Your HVAC contractor can tell you which models meet the requirements.
  2. Insulation. Upgrading your insulation can lead to a tax credit as well, but keep in mind that installation costs are not included in the eligible amount.
  3. Windows and Doors. Energy-efficient windows, skylights, and doors can bring in a tax credit. An alternative to replacement is to use storm windows and storm doors, many of which might also qualify.
  4. Roofs. Credits are available for roof products that reflect the sun's rays, such as metal roofs with pigmented coatings or asphalt roofs made with cooling granules.
  5. Water Heaters. Older water heaters use an enormous amount of energy to heat the water in the tank. More modern options, like a tankless water heater, are better for the environment and your bottom line.
  6. Solar Power. Solar water heaters, solar panels on the roof, and other solar elements can bring in a nice chunk of change when tax time rolls around.
  7. Biomass Stoves. Stoves that burn wood, crops, trees, plants, grasses, and the like are considered healthier for the environment, and the credit for the stoves does include the installation cost.
  8. Geothermal Heat Pumps. These pumps draw their energy from the ground instead of the air, and can be used to both heat and cool a building, plus provide hot water.
  9. Wind Turbines. Small wind turbines use kinetic energy to supplement or run your home's electrical system. The wind turbine must provide a capacity of no more than 100 kilowatts to qualify.
  10. Residential Fuel Cells. A very modern technology, fuel cells are not yet the most popular option for homeowners, but they do represent the cutting edge of the hydrogen economy.

Most tax credits expire at the end of 2010, but the credits for solar energy, geothermal pumps, fuel cells, and small wind turbines qualify until the end of 2016. So if you're ready to go green, now is the time!

About the author: Shannon Dauphin is a freelance writer based near Nashville, Tennessee. Her house was built in 1901, so home repair and renovation have become her hobbies.

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