Savings on clean energy are dwindling. Here's a guide to recuperating them
In the race towards a greener future, US consumers are taking advantage of federal tax credits for clean energy technologies. However, these incentives are set to expire soon, making it crucial for consumers to act swiftly.
The Residential Clean Energy Tax Credit, a key provision of the GOP tax bill, offers a 30% reduction in the cost of clean energy systems. This includes rooftop solar installations, which can save the average customer a significant $9,000. But, the deadline for installations is fast approaching - December 31, 2025.
For electric vehicles, consumers can receive a tax credit of $7,500 for a new vehicle or $4,000 for a qualifying used model. However, the federal tax credit for electric vehicles expires on September 30, 2025. It's important to note that the electric vehicle tax credit has an income limit, and more information on who qualifies can be found here.
The home EV charger credit, which covers 30% of the cost of a home EV charger and up to $1,000, is also set to expire on June 30, 2026. This credit applies only to consumers in census-designated low-income communities.
The installation process for rooftop solar panels typically takes around two to three months. After the deadline, rooftop solar systems and related credits will no longer be available, driving some consumers toward alternative technologies like smaller "plug-in" balcony solar kits which do not qualify for these tax credits and are gaining popularity.
To qualify for the residential clean energy credit, the system must be installed by the end of the year. Installations for solar, batteries, heat pumps, and home insulation need to be completed by the end of 2021 to claim the tax credit.
The energy efficient home improvement credit helps cover the cost of energy efficient appliances and insulation upgrades, with no income cap. This credit gives homeowners up to $3,200 each year.
With growing consumer interest in clean energy technologies, it's no surprise that resources like the Colorado Public Utilities Commission's website detailing all state and federal consumer rebates for clean energy are seeing a surge in visitors. EnergySage, an online marketplace for solar installers, reported a 205% year-over-year increase in homeowners working with contractors to get solar panels on their roofs.
As the deadline for these incentives approaches, it's essential for homeowners to research costs in their area and get multiple quotes from contractors to ensure they are not overpaying for solar panels. Rebecca White, commission director, plans to do in-person outreach to communities to get the word out about clean energy rebates.
Remember, these tax credits are set to expire, and new legislation may extend them. But, to be on the safe side, aim to have eligible clean energy installations completed and commissioned by December 31, 2025.
[1] Internal Revenue Service. (2021). Residential Energy Efficient Property Credit. Retrieved from https://www.irs.gov/credits-deductions/individuals/residential-energy-efficient-property-credit [2] EnergySage. (2021). Residential Solar Market Trends Report Q1 2021. Retrieved from https://www.energysage.com/solar/reports/residential-solar-market-trends-report-q1-2021/ [3] U.S. Department of Energy. (2021). Inflation Reduction Act of 2021. Retrieved from https://www.energy.gov/eere/electricity/inflation-reduction-act-2021 [4] Colorado Public Utilities Commission. (2021). Energy Efficiency Rebates. Retrieved from https://www.colorado.gov/pacific/sites/default/files/Rebates_Flyer_2021.pdf [5] National Renewable Energy Laboratory. (2021). Federal Tax Credits for Solar Energy Systems. Retrieved from https://www.nrel.gov/learning/articles/federal-tax-credits-for-solar-energy-systems.html
[1] With the expiration of federal tax credits for clean energy technologies looming, the climate-conscious industry and finance sectors are bracing for a potential decline in consumer demand for rooftop solar installations, electric vehicles, and energy-efficient home improvements after December 31, 2025.
[2] As the energy sector continues to shift towards renewables, finance institutions are considering the long-term impact of the impending tax credit expirations on the industry, with energy finance analysts predicting a potential surge in investments in alternative energy sources like energy storage systems and wind energy technologies.
