Updated Green Building Tax Credit Guide

Solar Power

In the past the federal government would pay for 30% of a home solar-power system, with a cap of $2,000. But now the cap has been removed. Installing solar panels on your roof that produce 5 kilowatts -- enough to power an average-size house -- costs $40,000.

So now the feds will pick up $12,000 of the cost. Many states also will pay a portion. (You’ll need to file IRS Form 5695 to claim the tax credit; the incentive is good through 2016.)

Solar Hot Water

A solar hot-water system is basically a box on your roof that captures the sun’s rays to heat water stored in a tank in your home. The feds will pay 30% of the cost, which ranges from about $2,000 for a system that is adequate in warm climates to $6,000 or more in very cold climates.

(You’ll need to file IRS Form 5695 to get the credit, good through 2016.) Sorry, the feds won’t pay for systems that heat water for a pool or hot tub.

Wind Power

Local zoning laws permitting, you can install a "small wind" turbine (one that generates 100 kilowatts or less) to provide electricity to your home. The feds will now pay 30% of such systems, which vary widely in price.

A turbine that could power a house now costs about $40,000, so the feds would pay $12,000 of that. (You’ll need to file IRS Form 5695; you can take advantage of the incentive through 2016.)

Home Improvements

You can get money back from the government if you add an energy-efficient roof, windows, doors, insulation, or heating and cooling equipment to your home. The tax credit is good for 30% of the cost up to a cap of $1,500.

The credit covers only the purchase cost of the product, except for labor costs associated with upgrading your heating or cooling equipment. The credit is good for improvements made in 2009 and 2010 (file IRS Form 5695).

This is an updated for the "Obama Stimulus Tax Credit Guide"

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