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Generate more tax breaks for energy saving

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in Small Business Tax

Generally, the provisions in the Energy Tax Incentives Act of 2005 expire after 2007. But the Tax Relief and Health Care Act of 2006 extends a passel of these tax breaks through 2008, including the following:

Solar & fuel-cell equipment. Homeowners can claim a 30 percent credit (up to a maximum $2,000) for equipment that uses solar energy to generate electricity; up to $2,000 for solar water-heating equipment; and up to $500 for fuel-cell power-plant technology that converts fuel into electricity.

Energy-efficient buildings. Owners of commercial buildings can take deductions — generally up to $1.80 per square foot — for upgrading existing energy systems and erecting energy-efficient buildings.

Energy-efficient homes. Contractors can claim a tax credit — generally $2,000 ($1,000 for an energy-efficient manufactured home) — for building energy-efficient homes.

Tip: The new law did not extend the residential-property credit (overall limit of $300, $200 for thermal doors and windows) that expires after 2007. Also, it did not address the hybrid-vehicles credit, which expires after 2009.

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