Good news for homeowners and businesses that plan to go solar in 2011. There are several federal tax credits that are still in effect or have been extended for the year. There’s the uncapped 30 percent federal tax credit on solar hot water and residential solar electric systems that are in effect until 2016.
The Residential Renewable Energy Tax Cut was established by the federal government through the Energy Policy Act of 2005. At first the credit has a maximum of $2,000 for solar energy systems but this is ratified by The American Recovery and Reinvestment Act of 2009, which states that an uncapped rebate is given to the cost of renewable energy system. Qualified systems include small wind and geothermal heat pumps, photovoltaic, and solar thermal systems.
In 2010, Congress extended the 1603 Program: Payments for Specified Energy Property in Lieu of Tax Credits. This gives businesses a cash grant from the US Treasury until they file their taxes to receive the 30 percent federal tax credit, which is called the Business Energy Investment Tax Credit.
Then there’s the Modified Accelerated Cost-Recovery System for renewable energy systems. A business that installs qualified solar energy systems in 2011 is entitled 100 percent bonus depreciation for the first year the system is used.