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Are there Rebates and Tax Savings for Renewable Energy?

Yes. Increasing the return on investment at the quickest possible rate can be greatly affected if you take advantage of the generous rebates offered by federal and even state governments. 

Federal Incentives

There is a tax credit available. Tax credits are different than tax deductions. Tax deductions are ways to reduce your taxable income, and only by that do you save money. For instance, if you made $50,000 last year and you spent $3,400 of that in a renewable energy investment, you would only pay taxes on $46,600. 

With a tax credit, the government basically hands you a wad of cash. If you spent $3,400 on a renewable energy investment, the government would pay you back 30% of your investment. This means that you would basically get a check for $1,020 (or they would take that off any taxes owed). Thus, your actual investment would be $2,380 rather than $3,400! There are some conditions, so please consult your tax professional for more details on this tax credit. Click here for the IRS form.

The Federal Production Tax (PTC) credit is for the purposes of providing wind generators with an inflation-adjusted tax credit of 2.0 cents per Kilowatt hour (KWH) of power generation. The tax credit expired in 2008, however the credit has been extended a number of times and has always been retroactive to the prior expiration date. 

There is also a provision for being able to accelerate the depreciation of some wind energy investments when calculating your tax liability.

State Incentives

Some states are more friendly than others when it comes to giving deductions, rebates and credits. 

A valuable resource for the latest information on various incentives can be found at http://www.dsireusa.org/ . They keep a running database of the latest information on this topic. 

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