Solar Panels For Homes

Today, more than ever, our energy consumption is on center stage. Not only do we pay too much for energy, we use too much.  Proper insulation can go a long way to help slow down our use.

Under the American Recovery and Reinvestment Act of 2009 (ARRA), the federal government has created tax credits for certain energy efficient consumer home improvement products. Fortunately, these tax breaks can be substantial. These credits are primarily for energy efficient home improvements but also include both alternative fuel and gas hybrid automobiles.

Unfortunately, as with many government tax documents, the language can be complicated. The eligibility requirements change based on the individual improvement. To further complicate matters, the dates for acceptance also change based on the improvement you are applying for.

Use this guide to help you understand the portion of the AARA dedicated to insulation and its use as a home improvement. This guide is designed for you to quickly and easily understand what the requirements are and stipulations involved in claiming this specific tax credit.

1. For insulation, tax credits are available for 30% of the cost of the material, up to $1,500. (Any material costs over $5,000 will not be eligible for rebate)
2. This credit is for your existing home ONLY, that is your principle residence. Vacation homes and rental properties are NOT applicable, neither is a new construction home
3. There is no income limit to receive a rebate. Everyone is applicable.
4. You must have a Manufacturer’s Certification Statement for your records. This is a signed statement by an insulation manufacturer that certifies the product qualifies for the tax credit. Make sure the manufacturer of the product you choose has this certification. 
5. To claim the tax credit, you need to file IRS Form 5695 and submit it when you file your 2009 taxes. Currently only the 2008 form is available. The 2009 form should be out in late 2009 or early 2010. To help with your filing the 2008 Form 5695 was claimed on line 53 of the 2008 Form 1040.
6. Two or more unmarried people living in the same home who both own it are each eligible for the tax credit. The credit must be for different improvements however. You cannot both apply for the same insulation credit. (Make sure to research the different eligibility requirements for the other energy efficient improvements covered.)
7. One person can have multiple improvements but the maximum credit may still be $1,500. If applying for multiple improvements make sure to research these. Some improvements, such as solar water heaters are a flat 30% with no upper limit. (Make sure to research the different eligibility requirements for the other energy efficient improvements covered.)

These tax credits are a positive step to help you obtain certain energy efficient products in your home and to lower your future energy consumption. They are extremely positive if you have already completed or are planning an upcoming insulation project. If your home has inadequate insulation, now is the best time ever to install insulation. Not only may you be eligible to receive a tax credit but you will save money on your utility bills and save energy for as long as you are in your home. 

This information pertains only to the insulation portion of the 2009 ARRA and should not be used for other energy efficient tax credits offered. Always consult a tax professional if you have any questions. 

Nick Semon is the owner of Insulationstop.com, a leading online supplier of radiant barrier and reflective foil insulation products. He uses his 15 year experience in the building materials industry to provide information to consumers about better insulation practices. For more information on saving energy visit InsulateOurEarth.com.

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