Even though home energy upgrades reduce the electric bill amount monthly, they are not always cheap. If you think about solar, energy efficiency, electric cars, among others, you will notice that you will have to spend a considerable amount of money to see later results in your bills. But, in 2018 there are energy tax credits available which will make home energy upgrades more accessible.
Electric cars are improving every year; however, they are a relatively new technology, as well as, more expensive in comparison to a gas-powered one. That is why federal and state governments offer tax credits to people who buy electric vehicles.
- Federal Tax Credit
The main federal incentive program for this type of cars available in the US is the Qualified Plug-in Electric Drive Motor Vehicle Tax Credit. Most of these cars are eligible for this tax credit, which reduces your federal tax burden by $7,500.
When the manufacturer of the car has sold 200,000 eligible electric vehicles, you won’t be able to use the tax credit if you buy from this manufacturer. Current sales projections reveal that most electric car manufacturers will still be eligible for this tax credit through 2018.
So, if you want to take advantage of this credit, the best and safest option is to buy as soon as possible, especially if you think about buying a Tesla, Chevy Volt or Bolt, or a Nissan Leaf that are some of the top-selling electric cars in the U.S. An exception to these brands is Tesla because the company aims to produce 500,000 vehicles by the end of 2018.
- State Tax Credits
On the other hand, you will find available a lot of state and local tax credits for electric cars; they not only include credits for buying electric cars but also for installing electric car chargers at your home or business.
- Tax Credits
In the case of energy efficiency, federal tax credits expired in 2016. But many states offer energy efficiency tax incentives in sales form or property tax exemptions property for you to purchase or install qualifying equipment.
- Other Financial Incentives
Your local utility can also provide some financial incentive for energy efficiency. Many of them offer rebates to efficient energy purchases including a range of appliances, building products, electronics, heating and cooling equipment, lighting, fans, pool pumps, and water heaters.
Rebates are available, in some cases, after you purchase and in some other after the installation process is complete. The total rebate amount depends on the product, going as low as $10 for CFL light bulbs or up to around $1,000 for larger equipment.
- Tax Credit
In 2018, the most significant energy tax credits available, without question, are the investment tax credits for solar aimed at homeowners and businesses. This credit applies to solar panel systems as well as solar hot water systems, and it is worth 30% of the cost of buying and installing a solar system.
At the end of 2015, the Congress extended the credit. As a consequence, you will have until the end of 2019 to claim the 30% benefit. After this period, the value will be reduced by a few percentage points a year until 2022. By that time, the credit will disappear for homeowners, and it will fall to 10% for commercial system owners.
Other incentives might be available for you when installing solar which can also include state tax credits and cash rebates. But the federal tax credit for solar is a major incentive available across the United States today.
If you need more information or assessment about energy efficiency and tax credits, you can visit our webpage or contact us. We are willing to help you with this matter or any problem that you come across.