With tax credit, consumers give turbines, solar panels a second look
The stimulus package allows buyers to claim a 30 percent tax credit for renewable-energy products.
At the Home and Garden Show in Augusta, Maine, on Saturday, the big attention-getter was over in the convention-center corner: a powder-blue wind turbine.Skip to next paragraph
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With clean lines and a sleek fiberglass composite skin, the home-scale windmill was fetching enough, but it was wearing something that made it even more attractive to passersby: a bright orange sign advertising that buyers could claim a 30 percent federal tax credit for its purchase.
Looking at the turbine, Bruce Cooper, a teacher, says he’s been thinking for six years about converting his home to wind power. “These tax credits may be just the thing that push me over the edge,” he says.
Across the United States, many in the alternative-energy and home-renovation industries report increased interest from consumers like Mr. Cooper, who have been enticed by the tax credits in the federal stimulus package to at least consider loosening their vise-grip on the purse strings and add something “green” to their homes.
The stimulus legislation allows consumers to claim a 30 percent tax credit in 2009 and 2010 for the purchase and installation of renewable-energy products such as wind turbines, solar panels, and geothermal heat pumps. Taxpayers may also claim a 30 percent credit, up to $1,500, for qualifying energy-efficient home improvements including insulation, ultra-efficient heating and cooling systems, and replacement windows.
Overall, the stimulus package outlines more than $25 billion for energy-efficiency and renewable-energy initiatives. In addition to the tax credits, those initiatives range from public-transportation benefits for commuters to some of the projects involved in the modernization of Defense Department facilities. The $25 billion also includes $3.2 billion for state and local energy-efficiency and conservation projects and $5 billion in weatherization funds for low-income households.
The funds have started to trickle out and will start flowing in earnest during the next several months.
Consumer incentives are a welcome development in the home-remodeling industry, which has been hit hard by the recession. Homeowner spending on remodeling declined 9.7 percent last year, according to the Joint Center for Housing Studies at Harvard University.
The tax credits are already boosting consumer interest, says Dave Moody, director of field marketing for Service Experts Inc., a heating and cooling company with 120 branches nationwide. “It’s having the desired intent,” he says. “It’s driving people toward energy conservation and more efficient appliances, from our observation.”
As consumers learn about the credits, activity is picking up at many of the company’s branches, says Mr. Moody, although he doesn’t have updated sales figures yet. To spur interest, the company is heavily promoting the products that qualify for the rebates on its website and at its stores.
Consumers’ use of the tax credits may depend largely on getting word out about them, says Moody. “The tax code is very confusing. It can take some time for consumers to take advantage [of the credits],” he says, adding that his company recommends that prospective buyers speak with a tax expert before purchasing anything.