Santa Fe Air Conditioning, Heating and Refrigeration - Serving the Kansas City Metro Area

Santa Fe Wind and Solar Power, and division of Santa Fe Air Conditioning, offers 3 forms of renewable energy. Photovoltaic (solar panels), hot water, and two different wind turbines for residential and commerical locations. Click on the links below to learn more about each type of renewable energy.

Residential Renewable Energy Tax Credit

Last DSIRE Review: 10/07/2008

Incentive Type:	Personal Tax Credit
Eligible Renewable/Other Technologies:	Solar Water Heat, Photovoltaics, Wind, Fuel Cells, Geothermal Heat Pumps, Other Solar Electric Technologies
Applicable Sectors:	Residential
Amount:	30%
Maximum Incentive:	Solar electric: $2,000 for systems placed in service on or before 12/31/08; no maximum limit beginning in 2009. Solar water heating: $2,000. Fuel cells: $500 per 0.5 kW. Small wind: $500 per 0.5 kW, up to $4,000. Geothermal heat pumps: $2,000.
Carryover Provisions:	Excess credit may be carried forward to succeeding tax year.
Eligible System Size:	0.5 kW minimum for fuel cells.
Equipment/Installation Requirements:	Solar water heating property must be certified by SRCC or by comparable entity endorsed by the state in which the system is installed. At least half the energy used to heat the dwelling's water must be from solar. Geothermal heat pumps must meet the requirements of the Energy Star program. Fuel cells must have an electricity-only generation efficiency greater than 30%.
Authority 1:	26 USC § 25D
Date Enacted:	8/8/2005 (Amended 2006, 2008)
Effective Date:	1/1/2006
Expiration Date:	12/31/2016
Authority 2:	H.R. 1424: Div. B, Sec. 106 (The Energy Improvement and Extension Act of 2008)
Date Enacted:	10/3/2008
Effective Date:	1/1/2008; elimination of the solar electric credit cap effective 1/1/2009
Expiration Date:	12/31/2016
Authority 3:	IRS Form 5695 & Instructions: Residential Energy Credits

Summary:

Established by the Energy Policy Act of 2005, the federal tax credit for residential energy property initially applied to solar electric systems, solar water heating systems and fuel cells. The Energy Improvement and Extension Act of 2008 (H.R. 1424, Division B) extended the tax credit to small wind energy systems and geothermal heat pumps, effective January 1, 2008. Other key revisions included an eight-year extension of the credit to December 31, 2016, the ability to take the credit against the alternative minimum tax, and the removal of the $2,000 credit limit for solar electric systems beginning in 2009.

A taxpayer may claim a credit of 30% of qualified expenditures for a system that serves a dwelling unit located in the U.S. used as a residence by the taxpayer. Expenditures with respect to the equipment are treated as made when the installation is completed. If the installation is on a new home, the "placed in service" date is the date of occupancy by the homeowner. Expenditures include labor costs for onsite preparation, assembly, or original system installation and for piping or wiring to interconnect a system to the home. If the federal tax credit exceeds tax liability, the excess amount may be carried forward to the succeeding taxable year.

The credit is calculated based on the individual’s expenditures excluding subsidized energy financing, which is defined as "financing provided under a Federal, State, or local program a principal purpose of which is to provide subsidized financing for projects designed to conserve or produce energy." Consumers who receive other incentives are advised to consult with a tax professional regarding how to calculate this federal tax credit.

The maximum allowable credit, equipment requirements, and other details vary by technology as outlined below.

Solar electric property

Maximum credit of $2,000 for systems placed in service from January 1, 2006, through December 31, 2008.
No maximum credit limit for systems placed in service from January 1, 2009, through December 31, 2016.
In case of joint occupancy, the maximum qualifying cost that can be taken into account by all occupants for figuring the credit is $6,667. This does not apply to married individuals filing a joint return. The credit that may be claimed by each individual is proportional to the costs he or she paid.
The home served by the system does not have to be the taxpayer’s principal residence.

Solar water heating property

Maximum credit of $2,000.
Systems must be placed in service from January 1, 2006, through December 31, 2016.
Equipment must be certified for performance by the Solar Rating Certification Corporation (SRCC) or a comparable entity endorsed by the government of the state in which the property is installed.
At least half the energy used to heat the dwelling's water must be from solar in order for the solar water-heating property expenditures to be eligible.
The tax credit does not apply to solar water heating property for swimming pools or hot tubs.
In case of joint occupancy, the maximum qualifying costs that can be taken into account by all occupants for figuring the credit is $6,667. This does not apply to married individuals filing a joint return. The credit that may be claimed by each individual is proportional to the costs he or she paid.
The home served by the system does not have to be the taxpayer’s principal residence.

Fuel cell property

Maximum credit of $500 per half kilowatt (kW).
Systems must be placed in service from January 1, 2006, through December 31, 2016.
The fuel cell must have a nameplate capacity of at least 0.5 kW of electricity using an electrochemical process and an electricity-only generation efficiency greater than 30%.
In case of joint occupancy, the maximum qualifying costs that can be taken into account by all occupants for figuring the credit is $1,667 per half kilowatt. This does not apply to married individuals filing a joint return. The credit that may be claimed by each individual is proportional to the costs he or she paid.
The home served by the system must be the taxpayer’s principal residence.

Small wind energy property

Maximum credit of $500 per half kilowatt, not to exceed $4,000.
Systems must be placed in service from January 1, 2008, through December 31, 2016.
In case of joint occupancy, the maximum qualifying costs that can be taken into account by all occupants for figuring the credit is $1,667 per half kilowatt, not to exceed $13,333. This does not apply to married individuals filing a joint return. The credit that may be claimed by each individual is proportional to the costs he or she paid.
The home served by the system does not have to be the taxpayer’s principal residence.

Geothermal heat pumps

Maximum credit of $2,000.
Systems must be placed in service from January 1, 2008, through December 31, 2016.
The geothermal heat pump must meet the requirements of the Energy Star program which are in effect that the time the installation is completed.
In case of joint occupancy, the maximum qualifying costs that can be taken into account by all occupants for figuring the credit is $6,667. This does not apply to married individuals filing a joint return. The credit that may be claimed by each individual is proportional to the costs he or she paid.
The home served by the system does not have to be the taxpayer’s principal residence.

For more information about the solar energy component of this tax credit (including the types and use of eligible property, the credit's interaction with other incentives, and project ownership requirements), see the Solar Energy Industries Association's (SEIA) Guide to Federal Tax Incentives for Solar Energy. Note that this guide was created prior to the October 2008 tax credit revisions. SEIA is in the process of revising the guide. Background
The Energy Policy Act of 2005 (Section 1335) established a 30% tax credit up to $2,000 for the purchase and installation of residential solar electric and solar water heating property and a 30% tax credit up to $500 per 0.5 kilowatt for fuels cells. Initially scheduled to expire at the end of 2007, the tax credits were extended through December 31, 2008 by Section 206 of the Tax Relief and Health Care Act of 2006.

In October 2008, through the Energy Improvement and Extension Act of 2008 (Division B, Section 106), the tax credits were extended once again –- until December 31, 2016 –- and a new tax credit for small wind energy systems and geothermal heat pump systems was created.

Contact:

Public Information - IRS
Internal Revenue Service
1111 Constitution Avenue, N.W.
Washington, DC 20224
Phone: (800) 829-1040
Web site: http://www.irs.gov

Business Energy Tax Credit

Last DSIRE Review: 10/08/2008

Incentive Type:	Corporate Tax Credit
Eligible Renewable/Other Technologies:	Solar Water Heat, Solar Space Heat, Solar Thermal Electric, Solar Thermal Process Heat, Photovoltaics, Wind, Biomass, Geothermal Electric, Fuel Cells, Geothermal Heat Pumps, CHP/Cogeneration, Solar Hybrid Lighting, Direct Use Geothermal, Microturbines
Applicable Sectors:	Commercial, Industrial, Utility
Amount:	For equipment placed in service on or before December 31, 2016, the credit is 30% for solar, solar, fuel cells and small wind; and 10% for geothermal, microturbines and CHP. (The geothermal credit, excluding heat pumps, has no expiration.)
Maximum Incentive:	$1,500 per 0.5 kW for fuel cells; $200 per kW for microturbines; $4,000 maximum credit for small wind. No maximum specified for other technologies.
Eligible System Size:	Small wind turbines: 100 kW or less Fuel cells: 0.5 kW or greater Microturbines: 2 MW or less CHP: 50 MW or less
Equipment/Installation Requirements:	Fuel cells, microturbines and CHP systems must meet specific energy-efficiency criteria
Authority 1:	26 USC § 48
Authority 2:	H.R. 1424: Div. B (The Energy Improvement and Extension Act of 2008)
Date Enacted:	10/3/2008
Effective Date:	10/3/2008
Authority 3:	IRS Form 3468

Summary:

The federal business energy tax credits available under 26 USC § 48 were expanded significantly by the Energy Improvement and Extension Act of 2008 (H.R. 1424), enacted in October 2008. The new law extended the duration -- by eight years -- of the existing credits for solar energy, fuel cells and microturbines; increased the credit amount for fuel cells; established new credits for small wind-energy systems, geothermal heat pumps, and combined heat and power (CHP) systems; extended eligibility for the credits to utilities; and allowed taxpayers to take the credit against the alternative minimum tax (AMT), subject to certain limitations.

Credits are available for eligible systems placed into service on or before December 31, 2016:*

Solar. The credit is equal to 30% of expenditures, with no maximum credit limit stated. Eligible solar energy property includes equipment that uses solar energy to generate electricity, to heat or cool (or provide hot water for use in) a structure, or to provide solar process heat. (Passive solar systems and solar pool-heating systems are not eligible.) Hybrid solar lighting systems are those that use solar energy to illuminate the inside of a structure using fiber-optic distributed sunlight.
Fuel Cells. The credit is equal to 30% of expenditures, with no maximum credit limit stated. The credit for fuel cells is capped at $1,500 per 0.5 kilowatt (kW) of capacity. Eligible property includes fuel cells with a minimum capacity of 0.5 kW that have an electricity-only generation efficiency of 30% or higher. (Note that the credit for property placed into service on or before October 3, 2008, is capped at $500 per 0.5 kW.)
Small Wind Turbines. The credit is equal to 30% of expenditures, with a maximum credit of $4,000. Eligible small wind property includes wind turbines up to 100 kW in capacity. This credit applies to eligible property placed into service after October 3, 2008.
Geothermal Systems. The credit is equal to 10% of expenditures, with no maximum credit limit stated. Eligible geothermal energy property includes geothermal heat pumps and equipment used to produce, distribute or use energy derived from a geothermal deposit. For electricity produced by geothermal power, equipment qualifies only up to, but not including, the electric transmission stage. For geothermal heat pumps, this credit applies to eligible property placed into service after October 3, 2008.
Microturbines. The credit is equal to 10% of expenditures, with no maximum credit limit stated (explicitly). The credit for microturbines is capped at $200 per kW of capacity. Eligible property includes microturbines up to two megawatts (MW) in capacity that have an electricity-only generation efficiency of 26% or higher.
Combined Heat and Power (CHP). The credit is equal to 10% of expenditures, with no maximum limit stated. Eligible CHP property generally includes systems up to 50 MW in capacity that exceed 60% energy efficiency, subject to certain limitations and reductions for large systems. The efficiency requirement does not apply to CHP systems that use biomass for at least 90% of the system's energy source, but the credit may be reduced for less-efficient systems. This credit applies to eligible property placed into service after October 3, 2008.

In general, the original use of the equipment must begin with the taxpayer, or the system must be constructed by the taxpayer. The equipment must also meet any performance and quality standards in effect at the time the equipment is acquired. The energy property must be operational in the year in which the credit is first taken.

If the project is financed in whole or in part by subsidized energy financing or by tax-exempt private activity bonds, the basis on which the credit is calculated must be reduced. (The formula is described in the tax credit instructions.) Subsidized energy financing means "financing provided under a federal, state, or local program, a principal purpose of which is to provide subsidized financing for projects designed to conserve or produce energy." Therefore, a business must reduce the basis for calculating the credit by the amount of any such incentives received.

For more information about the solar-energy component of this tax credit (including the types and use of eligible property, the credit's interaction with other incentives, and project ownership requirements), see the Solar Energy Industries Association's (SEIA) Guide to Federal Tax Incentives for Solar Energy.

History
The federal Energy Policy Act of 2005 (EPAct 2005) expanded the existing federal business energy tax credit for solar and geothermal energy property to include fuel cells, microturbines and hybrid solar lighting systems installed on or after January 1, 2006, and raised the credit for solar to 30%. Prior to the provisions of EPAct 2005, a 10% credit was available to businesses that invested in or purchased solar or geothermal energy property (excluding geothermal heat pumps).

* Note that the credit for geothermal property (excluding heat pumps) has no stated expiration date.

Contact:

Public Information - IRS
Internal Revenue Service
1111 Constitution Avenue, N.W.
Washington, DC 20224
Phone: (800) 829-1040
Web site: http://www.irs.gov