45L Tax Credit: A Push to Go Green

The fact that environmental upgrade is an issue that has got international powers bothered,  can be supported with the evidence that the government has finally passed a legislation, the 45L Tax Credit Act as a source of potential extra benefits for environmentally conscious and  affordable entrepreneurs, realtors and constructors.

45L Tax Credit

45L Tax Credit: An Overview

Governed by Section 45L of the Internal Revenue Code with a further authorization fiscal cliff legislation enacted in January, the tax credit to be given is $2,000 per unit for

  • newly constructed or
  • Qualified owner-occupied or rental housing units that meet the parameters. Major portion of the construction or rehabilitation of a unit should be finished with allotted accommodation before 2014. The occupation year is important as the tax credit is also claimed for that year.
  • At least 50% less energy should be consumed by the unit seeking credit than any other similar unit constructed in compliance with the 2006 International Energy Conservation Code, at least 10% of the energy savings pertaining to the building structure and design.
  • Each unit must be verified and certified by an Engineer who should state that the unit’s performance meets the set standard to qualify for the tax credit.

Some of the Specifications Required:-

  • At least 50% less energy should be consumed by the unit seeking credit than any other similar unit constructed in compliance with the 2006 International Energy Conservation Code, at least 10% of the energy savings pertaining to the building structure and design.
  • Each unit must be verified and certified by an Engineer who should state that the unit’s performance meets the set standard to qualify for the tax credit.

45L Federal Tax Credit

Equipment that are included in the Act:-

Solar Panels and Solar Water Heating Equipment

Solar technology, apart from making your home self-reliant, gives you a scope to qualify for the energy efficient home credit.

Furthermore, solar panels when installed in a residential property, increases its value, reduces the carbon footprint and electricity bill significantly. 20,000 dollars in 20 years, that is what Americans can end up saving with solar panels in their homes.

Wind turbines

The energy efficiency home credit is also available for the installation of wind turbines for the production of electricity. Furthermore, it saves the electricity costs of running an establishment.

Fuel cell

Fuel cell installation covers 30 percent of the cost of the project. The fuel cell should be attached to a principal property in the US with a capacity of at least ½ kilowatts. Individual cells get a tax credit for equipment of not more than 500 dollars.

Going green is the only way to ensure the continued existence of our species. This step will definitely encourage more people to realize the tremendous positive impacts of energy conservation on Mother Nature.

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