Tax Credits for a Green Energy Barrier
If you plan to cash in on energy-efficiency tax credits for the installation of a green energy barrier, now is the time to act. Green energy barrier is a reflective foil insulation designed for attic installation. As such, it qualifies for energy-efficiency tax credits set to expire on Dec. 31, 2011, unless Congress takes measures to extend the credits. Several high-value, whole-home tax credits run through Dec. 31, 2016. The 2016 credits do not include energy-efficiency tax credits for any type of insulation products.
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How a Green Energy Barrier Works
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In the winter, a green energy barrier produces radiant heat by trapping the heat in your home and radiating it back into the living quarters. Since heat rises, this process assists in eliminating the process that allows the escaping heat from leaving your home.
In the summer, a green energy barrier stops the heat that beats down on your roof from the sun, reflecting it back into the atmosphere before it enters and spreads throughout your home.
Green Energy Barrier Tax Credit
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Since a green energy barrier works as an insulation system expressly designed to reduce heat loss in winter and heat gain in summer, and its primary objective it to insulate your home, the installation of a green energy barrier qualifies under the energy-efficiency tax credit that expires at the end of 2011. The product you select must meet 2009 International Energy Conservation Code and amendments to take the tax credit.
When claiming the credit, do not include installation and labor costs as these are not part of the eligible components of the energy-efficiency tax credit.
The energy-efficiency tax credit limit stands at 10 percent of the cost of the product up to $500. Since there is a $500 cap on energy tax credits from 2006 to 2011, if you have claimed tax credits that total $500 or more, you cannot claim a tax credit for the installation of a green energy barrier. If any previous credit amounts to less than $500, you can claim the portion of the energy-efficiency tax credit that is the difference between $500 and the amount you previously claimed.
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Other Qualifying Insulation Products
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If you decide against a green energy barrier for your home’s insulation needs, you can use blanket or batts and rolls made from fiberglass, mineral sources, wool and plastic or natural fibers. Another choice is concrete block insulation that incorporates polystyrene, polyisocyanurate, polyurethane, or vermiculite or perlite pellets. You could also use foam board or rigid foam made of the same materials. Insulating concrete forms also qualify as do loose-fill insulation products and rigid fibrous or fiber insulation that use cellulose, fiberglass, mineral or wool elements. You can also look at sprayed foam and foamed-in-place applications that use cementitious, phenolic, polyisocyanurate or polyurethane as the insulating components. Structural insulated panels, which use foam board, or a liquid foam or straw core, are other insulation options that qualify for the energy-efficiency tax credit.
Considerations
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The tax credit for green energy barrier only applies to the installation of the product in your existing, primary residence. You cannot get the energy-efficiency tax credit for a rental property, a second home or for new construction. To qualify for the energy-efficiency tax credit, the product must be in service by Dec. 31, 2011. To claim the credit, you must file Form 5695 along with your federal income tax return. Some states offer energy-efficiency tax credits and other cost-saving programs applicable to the installation of energy-efficient products. Check with local authorities for information about relevant credits, grants and programs in your state.
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References
- Energy Savers: Products Eligible for Tax Credits Through 2011
- Energy Savers: Products Eligible for Tax Credits Through 2016
- Green Energy Barrier of Atlanta: Green Energy Barrier FAQ
- Energy Savers: How to Claim Your Tax Credit
- U.S. Department of Energy: Database of State Incentives for Renewables & Efficiency
Resources
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