Navigating the federal, state, and local government renewable energy tax breaks (credits, deductions, and incentive) can be quite confusing. Not to mention, the added utility company’s rebates and programs. As a result, I decided to put together a roadmap, to help you navigate this rather complicated process. 

 

Renewable energy Tax breaks

 

 

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The Federal Renewable Energy Tax Credit:

 

You better act quickly if you are interested in taking advantage of the biggest renewable energy tax credit. At the end of next year (2019), it will slowly start decreasing and until 2022. 

In other words, Congress could decide to extend the Renewable Energy tax credit… But, there is no guarantee that they will.

The federal renewable energy tax credit allows you to deduct 30% of the cost of installing a solar or wind turbine system from your federal taxes.

The average price of a home solar system in the United States is around $15,800 for a 5kW system. A 30% tax credit on that amount saves homeowners just over $4,720.

As you can see, in the photo below provided by Energysage.com, the tax credit will slowly start decreasing over time and eventually disappear. However, the exception is that there will be a permanent 10% tax credit for commercial use of renewable energy systems. 

 

Federal solar tax credit

 

As of the date of this writing, you only have around 1 year to get your butt in gear If you want to take advantage of these serious savings.

Meanwhile, if a $15,000 solar system installation sounds like its way over your budget… You aren’t alone.

This is why I wrote an article about how you can DIY (Do It Yourself) solar panels.

The DIY solar panel system is a step-by-step video instruction guide that will teach you how to build your own solar energy system for around 25% of the cost that you would have paid a professional installer. 

In other words, that’s nearly a 75% savings! 

Surprisingly, you can actually build a solar energy system in your spare time for a very reasonable price. This guide will help you build each solar panel in approximately 1 hour and for around $100!

 

 

State Tax Credits:

 

Most states and some city governments have tax breaks (incentives, deductions, or credits) that can be used in addition to the federal tax credit for renewable energy or energy efficiency updates to your home!

First, take a look at the U.S. Department of Energy’s website called DSIRE (Database of State Incentives for Renewables and Energy).

It is a super handy tool for understanding federal, state, and local tax incentives. The site also includes utility company incentives for each state.

Just visit the web page and click the state that you live in 🙂

 

There are two solutions to the current energy dilemma:

  1. Energy efficiencyuse less energy by insulating your home, and installing WaterSense and Energy Star rated appliances or conversion kits.
  2. Renewable energy install solar panels, wind turbines, etc.

 

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State programs are very specific and vary widely, so make sure to research your state’s energy tax policy. Of course, a simple online search should produce very helpful results.

 

State tax breaks can be broken down into three main categories:

 

  1. Sales tax exemptions (many states exempt purchases of energy-efficient products or renewable energy equipment)
  2. Income tax credits or deductions (available in 22 states)
  3. Property tax rebates or exemptions (available 32 states)
Similarly, this list is broken down by state and is very easy to navigate.

 

 

 

Appliance Rebates:

 

 

EnergyStar has a rebate finder that is super easy to use! Simply, type in your zip code and it will give you a list of the current rebates that your utility companies are offering!

Santa Monica, California is offering 10 mail in rebates. I couldn’t get a screenshot off all 10, but here is an example of what three of them look like:

 

 

rebate offers

 

 

 

Utility Company Rebates:

 

 

Check with your utility company to see whether they have any of the following programs:

 

1. LED lightbulb replacements

According to EnergyStar.gov, the average home has approximately 40 lightbulbs.

You can save $128 per 100-watt light bulb equivalent over the life of the LED light by making the switch.

That’s 40 lights x $128= $5,120 saved! 

If you are ready to save money by making the switch, you can find 100-watt equivalent lightbulbs at the Sustainability Shop.

 

Energy star rated light bulbs

 

In short, I would highly recommend switching to LEDs over CFL lights. Unfortunately, CFL lights are made with mercury, which can become hazardous to the environment if they are not disposed of properly. 

 

 

AmazonBasics LED (100-watt incandescent light bulb replacement)

 

 

2. Programmable thermostats

Some utility companies offer rebates or incentives if you install a programmable thermostat.

Most importantly, a programmable thermostat helps you have more control over the temperature in your home and save you money by doing so. You can read about the 8 Benefits of Programmable Thermostats here. 

 

3. Recycle old appliances

There are some utility companies that will pick up your old appliances and then give you a rebate on purchasing a new EnergyStar rated one! Double dip savings! 

Moreover, often times when you purchase a new appliance from a store they will charge you to remove your old appliance.

Calling your utility company before shopping for a new appliance can help you by:

First, save money by getting advice on which appliances are the most energy efficient.

Second, they may remove your old appliance and recycle it for free.

Third, they may offer rebates for approved EnergyStar and WaterSense appliances and fixtures.

 

4.  Upgrading to EnergyStar rated appliances

Use the EnergyStar rebate finder to see what kinds of incentive programs your utility company offers for washers, dryers, dishwashers, tankless water heaters, etc.

5. Tune up your furnace

Your utility company may offer a forced air furnace diagnostic tune-up rebate.

6. Winterization and insulation upgrades

Ask your utility company what kinds of rebates they offer for upgrading your home to become more energy efficient. The Sustainability Shop has DIY window and electrical outlet insulation kits.

 

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In sum, by implementing these energy efficiency and renewable technology suggestions you can attain large savings. Moreover, it would seem that you can obtain savings from many different avenues.

 

 

The 10,000 Foot Overview:

 

Start by changing simple habits and using products that are sustainable/reusable.

Moreover, make sure to talk to your family, friends, and community about sustainability. Knowledge helps people become aware of their actions which will help everyone make a larger impact together.

We got into this resource depletion and global warming issue together, which means that the only way out is to solve the issue as a community 🙂

Recently, scientists have released a warning that the world has less than 15 years to reduce the carbon output to nearly 0 or else face serious climate change consequences.

Insulation can increase your energy efficiency, and save you tons of money on your next utility bill. You can find several insulation solutions on Eco Economic’s Sustainability Shop page.

The shop includes energy efficiency and water conservation conversion kits, solar products, zero-waste, and minimally packaged home goods.

Becoming a Sustainability Hero has health, environment, and budget benefits.

Interested in learning more about how to create wealth with the money you save by going green? Pre-enroll for a Free mini-course on Tax Tips, Business Tricks, and Real Estate Knowledge!

 

Increase your Financial IQ

 

 

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If you have enjoyed this content, please remember to pin and share!

By sharing we can help others become Sustainability Heros too! Remember, it is our own lives and futures at stake.

Interested in a particular topic? Comment below!

 

 

 

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Lynzee Lai

The goal of this site is to increase conscious consumerism (when consumers “vote” for earth-friendly products and practices by purchasing from companies who put its people and the planet first). The idea is that if there is a high demand for products that protect the environment, companies will be incentivized to expand their earth friendly product lines. On the other hand, environmentally damaging companies will be economically motivated to change their practices or face going out of business. Click on the Eco Economics tab to read about the company's mission and goals.