As featured in The Wall Street Journal, Money Magazine, and more!

Year-End Tax-Saving Move: Green Energy

This article was written by in Taxes. 2 comments.

CNN Money is offering seven suggestions for reducing your tax, all possible before filing your 2007 taxes. The first suggestion is to “re-energize” your home.

You can reduce your tax bill by up to $500 if you install insulation, windows, doors or central air conditioning that meet certain energy conservation standards. You also can take a credit up to $2,000 if you install a solar-powered hot water system or solar photovoltaic panels, which convert sunlight into electricity.

While this tax credit sounds interesting, I don’t see it as an immediate financial advantage for the taxpayer. Yes, making these changes may increase the “value” of the house, but only if a buyer recognizes that down the road. You won’t get as much tax back as you would spend to make these changes. So you’ll owe the government less, but more money will leave your pocket. Here are the credits you can expect to receive:

* $50 for each advanced main air circulating fan
* $150 for each qualified natural gas, propane, or oil furnace or hot water boiler
* $300 for each item of qualified energy efficient property.

Even if you go on a spending spree, the maximum credit you’ll receive on your tax form is $500. From a financial standpoint, this is likely not worthwhile, but green energy will eventually be less harmful to the environment. I’d like to see better incentives.

7 Year-End Tax-Saving Moves [CNN Money]
Treasury and IRS Provide Guidance for energy Credits for Homeowners [IRS]

Updated June 20, 2014 and originally published November 19, 2007. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

Email Email Print Print
About the author

Luke Landes is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about Luke Landes and follow him on Twitter. View all articles by .

{ 2 comments… read them below or add one }

avatar Anca

“From a financial standpoint, this is likely not worthwhile, but green energy will eventually be less harmful to the environment.”

I think you’re missing the point, for which I blame the CNNMoney article. They completely failed to mention the fact that all these green energy measures, while having a higher initial cost, will result in high energy savings. These devices/etc will pay for themselves in possibly a matter of a few years, after which it’s like getting free money.

Reply to this comment

avatar Bill

Thank you Anca…I see this so often in CNN articles about finance. They seem to miss the main or one of the major points for making an investment/purchase.

The payback period for replacing many of your old appliances is pretty short. If you have single pane windows or an old house with little/no insulation an upgrade saves some serious heat – not to mention just make your house more comfortable.

The tax benefits mentioned are only the gravy for these upgrades.

Reply to this comment

Leave a Comment

Note: Use your name or a unique handle, not the name of a website or business. No deep links or business URLs are allowed. Spam, including promotional linking to a company website, will be deleted. By submitting your comment you are agreeing to these terms and conditions.

Notify me of followup comments via e-mail. You can also subscribe without commenting.