How Energy Efficiency Can Save You Money at Tax Time

Everyone’s favorite date is coming soon! We’re talking about April 15th of course—Tax Day—and your opportunity to settle up with Uncle Sam. By now, you should have received your W-2’s, 1099’s, 1095’s, and all of the other documents you’ll need for filing your return. In general, there are two categories of tax filers. For many people, this is a happy occasion—a time to claim that big tax refund. For others, they’re looking for any legal way to reduce their tax liability in the hope of at least breaking even with the government.

Regardless of the category you may consider yourself to be in, there’s a website that might offer some additional ways to reduce your tax bill or provide other savings benefits. If you’re in the first category of tax filers, it offers opportunities to increase your refund and put a few more dollars back into your pocket. If you’re in the second category, then this may offer information that will help resolve your dilemma.

The website is www.dsireusa.org. (Please make sure you add the .org in your search for this website. Our firm is NOT responsible for any other site you’ll find if you don’t!) This site is hosted by the North Carolina Clean Energy Technology Center at North Carolina State University and it provides a Database of State Incentives for Renewables & Efficiency (DSIRE). It offers the most comprehensive source of information on incentives and policies that support renewable energy and energy efficiency in the United States and is funded by the U.S. Department of Energy.

In the early days of this project, you could purchase a summary report in hard copy and wait for it to be mailed to you, hoping to find information that would be pertinent to you. Now, this information is all online and freely available to anyone who has an interest in seeing all of the programs for which they may be qualified. These incentives range from Personal and Corporate Tax Credits to Rebate Programs, Utility Rate Discounts, Grant Programs and Sales Tax Incentives.

The information in this database covers all 50 states, US Territories and the District of Columbia, so you can find information relevant to your company, your primary residence and even your vacation home! Finding the programs applicable to you couldn’t be easier. From the home page, you can click on the US map to see all of the programs available for the state of your choosing, or you may enter your ZIP code for even more precise information. For example, when I click on my state of residence, there are 77 programs listed. When I enter my ZIP code, I find there are 49 programs available for my specific area within the state.

By searching the database, individuals will find a Residential Energy Efficiency Tax Credit of up to $500 for replacing certain things in your home – windows, hot water heaters, etc. This program covers purchases made between 2011 and 2016 and offers the credit if the new system meets the energy factor or thermal efficiency standards. Nice!

Another program that caught my attention is the Duke Energy Progress – Rate Discount for Energy Star Homes. This program offers incentives for homeowners to enhance the energy efficiency of their homes to meet or exceed Energy Star standards. In order to qualify for this program, you, as the homeowner, are responsible for having your home certified by a third-party inspector. The cost for this usually runs between $500 and $800. The benefit to you: 5% off the total monthly electric bill for the life of your home! While this does not help with your current tax obligation, it does offer an electricity bill savings benefit to you throughout the year and enhances the resale value of your home when you are ready to put it on the market.

As you might expect, the website includes a standard disclaimer:

“The information presented on the DSIRE® website provides an unofficial overview of financial incentives and other policies. It does not constitute professional tax advice or other professional financial guidance, and it should not be used as the only source of information when making purchasing decisions, investment decisions or tax decisions, or when executing other binding agreements. Please refer to the original source materials and the individual contact provided below each policy/incentive summary to verify that a specific financial incentive or other policy applies to your project.”

However, you may rest assured we can offer professional tax advice and we would be happy to meet with you to review your personal situation to help you make confident decisions.

Bradshaw, Gordon & Clinkscales, LLC