A non-refundable credit is available for amounts spent on certain residential energy improvements. Taxpayers may take the credit for qualified photovoltaic property, qualified solar water heating property, or qualified fuel cell property placed in service in 2006 or 2007, provided that the property is used exclusively for purposes other than heating swimming pools or hot tubs.
The credit is equal to 30% of qualifying expenditures, with a maximum credit of $2,000 for qualified photovoltaic and qualified solar water heating property expenditures, and $500 for each 0.5 kilowatt of capacity of qualified fuel cell property expenditures.
Additional tax credits and deductions generally apply in 2006 and 2007 under legislation enacted in 2005. The non-business energy property credit and the residential energy efficient property credit are available for the certain types of energy-efficient property that meet eligibility requirements. A business tax credit is available for the construction of new energy-efficient homes substantially completed after 2005. A deduction is available for construction of energy efficient commercial buildings. A manufacturer's credit is available for energy efficient dishwashers, clothes washers, and refrigerators. Available to all types of businesses is a solar tax credit for the cost of new property that is used to generate solar energy for electricity, heating or cooling, or for certain types of geothermal energy.
