The 2006 Florida Energy Act created a renewable energy technologies grants program, a solar rebate program, a renewable energy technologies tax incentive program and provides a sales tax holiday for energy efficient products. Additional funding was provided by the 2007 Florida Legislature to continue the grant and solar rebate programs. This saves great cost of solar energy user. Please click here for the state-sponserd rebates.

Let us help you harvest the green energy freely in the sunshine state.

Tax Credit Opportunities for Solar and Energy Efficiency

The Energy Policy Act of 2005 (EPAct 2005) is the first effort of the United States government to address U.S. energy policy since the Energy Policy Act of 1992. The law provides new tax incentives for a number of solar and energy efficiency measures. Among them are: The solar and energy efficiency provisions are found in Title XIII, Subtitle C, from Pg.1332 to Pg.1390 of the act.

PLEASE NOTE : The effective dates are based on current law and in general everything placed in service through 12/31/08 qualifies for the federal tax incentives. There is legislation being considered in U.S. congress that may extend these dates.

An Important Distinction

There is an important difference between a tax deduction and a tax credit. A tax deduction is subtracted from income before total tax liability is computed. On the other hand, a tax credit is subtracted directly from the total tax liability. This means that a deduction and a credit have very different values, with a credit being 3 or more times more advantageous to the taxpayer than a deduction. For example, a tax credit of $1,000 for someone in the 28% tax bracket is equivalent to a tax deduction of $3,571.

Combined Incentives

In many cases, multiple tax incentives may be claimed. In the case of a new home for example, the builder may claim credit for the high efficiency home and the homeowner may claim tax credits for solar hot water and photovoltaic and fuel cell systems. Other financial incentives, such as utility or SunBuilt rebates, further reduce the cost of building or owning a solar and energy efficient home.

Solar Photovoltaic and Hot Water Systems

This provision offers tax credits to individuals for residential solar energy systems.

• For solar hot water systems, the allowable tax credit is 30% of the qualified solar system expenditures up to a maximum tax credit limitation of $2,000.
• For solar photovoltaic (PV) systems, the allowable tax credit is 30% of the qualified PV system expenditures up to a maximum tax credit limitation of $2,000.

The incentives apply to equipment placed in service during 2006 through December 31, 2008. The IRS form to claim the credit is available here .(only for non-business use of your home)

In addition, the provisions of the bill substantially increases the business investment tax credit from 10% to 30%. This tax credit is available to businesses that purchase solar thermal and PV systems during calendar years 2006 and 2007.

This provision offers business taxpayers a deduction of $1.80 per square foot for commercial buildings that achieve a 50% reduction in annual energy cost to the user, compared to a base building defined by the industry standard ASHRAE/IESNA 90.1-2001. Energy costs refer only to heating, cooling, lighting and water heating, since only these uses are within the scope of the ASHRAE standard and within the control of the building designer.

Each of the three energy-using systems of the building ? the envelope, the heating, cooling and water heating system, and lighting system ? is eligible for one third of the incentive if it meets its share of the whole-building savings goal. Explicit interim compliance procedures are provided for lighting.

Eligible buildings include commercial buildings such as: offices, retail buildings, warehouses, etc., rental housing of four stories or more, and publicly-owned buildings. For publicly-owned buildings, there is an interesting provision allowing the credit to pass through to the "person primarily responsible for designing the building."

New construction in an existing building is also eligible for the tax deduction, with one third of the deduction amount for new construction that affects the new energy-using system (such as lighting or heating, cooling and water heating).

Compliance is determined by third party inspectors who review the plans and the actual in-place construction. Energy savings are determined by software that must be certified by the Department of Energy as meeting criteria of consistency and accuracy, following the successful experience of California?s performance-based energy code enforcement.

The incentives apply to buildings or systems placed in service during 2006-2007, although extenders increasing the eligibility through 2009 or 2010 are a distinct possibility.

New Homes

This provision offers homebuilders a tax credit of $2,000 for homes that reduce energy use for heating and cooling only (not hot water) by 50% compared to the national model code ? the 2004 IECC Supplement (assuming an SEER-13 air conditioner). Producers of manufactured homes can also choose to qualify for a tax credit of $1,000 for homes that save 30%. This $1,000 credit for reaching 30% savings is not available for site built homes, which must reach the 50% savings tier to qualify for the $2,000 credit.

The form to claim the credit is available here .(Valid through Dec. 31, 2008.)

Existing Homes

These provisions offer cost-based incentives of 10% of the amount expended by the taxpayer for "Qualified Energy Efficiency Improvements" and up to $300 for "Qualified Energy Property" up to a maximum credit limit of $500.

"Qualified Energy Efficiency Improvements" are specifically defined as:

• Any insulation material or system specifically designed to reduce heat loss or gain
• Exterior windows (including skylights)
• Exterior doors
• Any metal roof having pigmented coatings specifically designed to reduce heat gain which meet Energy Star program requirements.

"Qualified Energy Property" is defined as:

• Electric heat pump water heater with EF of 2.0 or greater
• Electric air source heat pumps with HSPF of 9.0 or greater
• Geothermal heat pumps:
  • Closed loop products with EER of 16.2 and COP of 3.3 or greater
  • Open loop products with EER of 14.1 and COP of 3.3 or greater
  • Direct expansion (DX) products with EER of 15 and COP of 3.5 or greater
• Central air conditioner that receives the highest efficiency tier established by the Consortium of Energy Efficiency as of January 1, 2006 (click for details)
• Natural gas, propane or oil water heater with EF or 0.80 or greater
• Natural gas, propane or oil furnace or hot water boiler with AFUE of 95% or greater
• Advanced main air circulating fan used in natural gas, propane or oil furnace that uses no more than 2% of the total annual energy use of the furnace.

Credit limitations on qualified energy property are as follows:

• $50 for any advanced main air circulating fan
• $150 for any qualified natural gas, propane, or oil furnace or hot water boiler
• $300 for any item of qualified energy property.

Residential Fuel Cells

This provision offers cost-based 30% tax credits to individuals for qualified residential fuel cell property expenditures up to a maximum credit limitation of $500 for each 500 watts installed capacity.

Fuel Cells and Microturbines Used in a Business

This provision offers tax credits for fuel cells and microturbines used in a business. To qualify for the credit, fuel cells are required to be 500 watt capacity or greater with a generation efficiency of 30% or greater. Microturbines are required to be of 2,000 kilowatt capacity or less with an efficiency of 26% at International Standards Organization conditions. Tax credits and limitations are as follows:

• For fuel cells, a tax credit of 30% of the expenditure up to a maximum of $500 per 500 watts of capacity.
• For microturbines, a tax credit of 10% of the expenditure with a credit limitation of $200/kW.

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Toll Free Fax: (866)393-5756    Email:amerisolar@yahoo.com