Tax Tips by Kelly Bullis: Solar energy credits: Are we there yet?
For the Nevada Appeal
Much has been said over the last few years, and more recently in the last tax law passed by Congress, about getting money back for upgrading your home or business to be more energy efficient.
The other day I was enjoying one of my favorite pasttimes: “Ask the salesman.” This time, I was at my favorite home improvement store looking at the solar power display. What triggered my attention was the big sign that said, “30 percent energy credit!” While I stood there thinking up all kinds of questions, out of nowhere (like a leprechaun), out jumped a salesman.
After exchanging pleasantries, he began with trying to impress me by telling me that if I purchased this now, the IRS would give me a refund of $6,000. A quick mental calculation then told me that the gross price was $20,000. (A couple of years ago, I inquired and the price was $30,000. Wow I thought. Waiting a couple of years has already saved $10,000!). I asked the “leprechaun” how he would feel if he purchased right now and in two years the price went down to $7,000. I went on to point out that it seems kind of foolish to end up paying on a loan with a balance of about $13,000 when one’s neighbors would only be paying $7,000 (or less?) for the same thing.
He tried to tell me how I would have been saving on my power bill for those two extra years. I thought, “Not really, because instead of paying NVEnergy on a monthly basis, I would have been paying his store about the same amount each month.” Somehow, the savings just weren’t adding up in my favor … yet.
My conclusion is that solar energy is looking like flat-screen TVs did a few years ago. Only a few years ago they cost $5,000 and today they cost about $700. Even with the 30-percent tax credit, the numbers just don’t work out – yet.
The good news: We are getting closer. With improved manufacturing techniques and mass production, I’m thinking that in two-three years, most homeowners could purchase enough solar panels to cover all their electrical needs (in the daytime at least) for around $7,000. Then, even if there was no energy credit, it would be worth considering. I know I would buy it. The good news is that this special tax credit runs through 2016 so there is plenty of time to wait for the prices to come down and still get the credit – assuming Congress doesn’t take it away for some unknown reason. Now I bet all the solar power Leprechauns are mad at me. Sorry.
In the meantime for 2010, if you were planning on upgrading your windows, exterior doors, insulation, roof, furnaces, central air conditioners, and water heaters, you can still get up to $1,500 tax credit back, as long as you owe at least that much in income tax, when you file your 2010 tax return. If you did any of those things in 2009, you can get a credit now.
• Kelly Bullis is a Certified Public Accountant with over 30 years of experience. Contact him at 882-4459.