Would you wait 2 months if it meant you'd save $9,400?

We all know solar panels make sense for many American households (and for some - wind power as well). The hurdle most of us have been facing is the high cost of installation coupled with the feeling that the present cap on federal tax credits, just wasn't enough to motivate us into taking action.

Under the current incentive plan, which expires December 31, 2008, the maximum federal tax credit was capped at $2,000. New legislation gives upgraded and extended tax credits for residential wind and solar systems installed between 2009 and 2016.

The good news: Starting 2009 the federal tax credit for residental PV solar and wind systems will be increased to a true 30% (of installation cost), which will be applied to the bottom line of your taxes. If you are already in the process of installing one of these systems, by delaying "turning on" the systems until 2009 you can still take advantage of these new incentives.

Let's take a look at how much better the new incentives will be. As an example, let's say you are looking at installing a PV solar system at your house and the installation cost is $38,000.

Small wind turbines will qualify for up to a $4,000 tax credit under the new system. With more affordable residential sized wind systems becoming available, don't be surprised if you see wind becoming more mainstream like solar.

Credits for solar hot water do not change under the new plan. It will remain at 30% of the installed costs with a cap of $2,000. The cap is usually enough to cover about 30% of most projects.

For more info on federal, state and local incentives for energy conservation, energy efficiency and renewable energy, visit DSIREusa.org.

Not sure if solar or wind is right for you? Need a recommendation for a reliable, full-service solar or wind installer? Drop us an email at GreenDE [at] GreenDelaware.com.