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 offers a federal tax credit for 30% of the total installed cost of any wind power system with a 100 kilowatt capacity or less, but the credit will not exceed $4,000. The limitation of the Act is that it only applies to new systems installed from 3 October 2008 through to December 2016, so any current systems will get no tax relief. In addition, for home wind turbines, the credit is further limited to the lesser of $4,000 or $1,000 per kW of capacity.
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:
“The AWEA thanks President Bush for acknowledging and promoting the role of small wind power solutions towards our energy security and environmental concerns. These subsidies will promote Americans to save on energy costs, while reducing global warming in a big way.”
This is the first federal tax credit for small wind power systems since 1985, and experts predict the legislation could expand the American wind energy industry by 40 percent or greater each year. And together with the soon-to-be finalized equipment certification system, this will aid in securing the U.S. as the leading market worldwide.
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.
With both the wind and solar power industries operating in the same renewable energy market, it made sense that the legislation also offers tax relief for solar power installations. Small solar power owners receive 30% credit on the cost of the system, limited to four thousand dollars. And commercial solar owners get an unlimited 30% tax credit on their installation costs.
How does the new legislation influence privately made small wind turbines? It looks like do-it-yourself wind power systems can receive some tax incentives, as long as it can be shown when and how much costs were. Just remember, to get professional legal advice to help you enjoy the best 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.