Using Tax Credits To Minimize Your Small Wind Turbine Cost
Just a few months back, before President Bush left office, he signed the revised Emergency Economic Stabilization Act of 2008 into law. In that legislation is a an opportunity for small businesses, farms, and residents to credit some of their small wind turbine cost against their tax expenses.
The Act has allowed us to get a tax credit of 30% of the cost of our wind power system, provided that it’s power capacity does not exceed one hundred kilowatts, and the credit is limited to $4000. However, there are a few problems with the Act. Firstly, it does not apply for wind generators installed before 3 October 2008. Secondly, with home wind turbines, the credit is further limited to the lesser of one thousand dollars per kilowatt and four thousand dollars.
In the past, the United States led the global small wind turbine industry, but it started to slump with other countries offering higher subsidies for household renewable energy solutions. So Ron Stimmel, a small wind advocate for the American Wind Association (AWEA), accepted the new Act with open arms, and he had this to say:
“We thank Congress for recognizing and supporting small wind systems as an important contributor toward energy security and a cleaner environment. This credit will help individuals cut their electric bills while combating global warming in a tangible way.”
Being the first federal tax subsidy for small wind turbines since 1985, industry analysts believe it could help inflate the United States wind power market by over forty-percent a year. Not to mention the equipment certification scheme that, together with the Act, could help secure America as the global market leader.
The legislation was brought about thanks to the AWEA’s persistent requests for the the wind power market to be able to compete equally with the solar power industry. The AWEA was determined for small wind turbine owners to receive a 30% tax credit on the cost, provided their systems were no bigger than one kilowatts.
Since the two industries share the same renewable energy market, the wide legislation also expands on a similar credit for the PV solar industry that was first enacted in 2005. Domestic PV solar systems now receive a 30% credit, limited to $4,000, and commercial installations can get the same, but uncapped, credit.
So how does this act affect anyone who has installed their own system? By the looks of things, DIY renewable energy enthusiasts can also enjoy the federal tax credit as long they have proof of all installation costs and the date they were incurred. But, it is best to get sound legal advice first to help you maximize any tax credit due.
With the new tax credit, coupled with potential state-side credits, we cannot see a better time for anyone to invest in their own renewable energy system at home and offset the wind turbine cost. Whether this means getting an expensive professionally installed solar/wind power hybrid, or learning to do it yourself, potential electricity savings are a decision away. At the end of the day the choice is yours.