Solatube® Daylighting Systems, Solatube Smart LED™ Systems, and Solar Star® Attic Fans give you three ways to reduce your home energy use. And now, they could earn you tax credits on your state tax return. Our Solar Star Attic Fans are also eligible for federal tax credits. To learn more, visit www.dsireusa.org (state tax credits), www.irs.gov (federal tax credits) or speak to your tax professional.
Important: Specific Solatube Daylighting Systems and Solatube Smart LED Systems were eligible for federal tax credits for energy efficient building products in 2012 and 2013. Please note that there is no longer a federal tax credit offered for ENERGY STAR® rated skylights like these. To view a list of qualifying systems by year, click the appropriate Manufacturer’s Certification below:
What is the American Taxpayer Relief Act of 2012?
The American Taxpayer Relief Act of 2012 was passed by the U.S. Congress on Jan. 1, 2013. Its purpose was to prevent income tax increases for most Americans and significant federal budget cuts that many feared would negatively affect the nation’s economy. Part of this legislation revived tax credits for skylights, the category Solatube Daylighting Systems fall under, and extended them through Dec. 31, 2013. The new bill provides individual homeowner as well as business tax credits.
What are the individual tax incentives for Solatube Daylighting Systems and Solatube Smart LED Systems?
Homeowners can receive a 10% tax credit of the product cost with a maximum deduction of $500. Installation fees are not included. The bill also retroactively allows for installations since the previous expiration date. This means daylighting systems purchased and installed between Jan. 1, 2011, and Dec. 31, 2013, qualify for the tax credit. Starting in 2014, there is not a federal tax credit for tubular daylighting devices.
What are the business tax incentives for Solatube Daylighting Systems?
Builders and contractors can receive tax credit up to $2,000 for new and renovated energy efficient dwellings. The bill also changes the energy efficiency requirements. Previously, dwellings had to be 50% more energy efficient than homes constructed according to the 2003 International Energy Conservation Code (IECC). The new bill references the 2006 IECC edition as the standard.
Are there any limitations on the tax credit?
Yes. The $500 tax credit limit is cumulative, dating back to 2006. That means, if you took previous credits and have already reached the cap, you will not qualify this time around. If you have not made any claims or your previous claims fell below the cap, you may still take credits up to the $500 limit. For example, if you claimed a total of $400 energy efficiency tax credits in the past, you can claim up to another $100 before you reach the cap.
What is the Emergency Stabilization Act of 2009?
On Oct. 3, 2008, George W. Bush signed the Emergency Stabilization Act of 2009, which extended the credits available for solar-powered energy systems and expanded the qualifying product requirements. This allows for a 30% tax credit on the purchase and installation of residential solar water heating, photovoltaic equipment, and fuel cell property.
Essentially, this means there are three main areas of 30% tax credit available:
• Residential solar water heating
• Residential photovoltaic equipment
• Residential fuel cell property
What Solar Star products are eligible for the federal tax credit?
The solar panel portion of all Solar Star Attic Fans, both roof and interior mount models, qualify for the category “solar energy systems: photovoltaic systems” as defined below:
“Property that uses solar energy to generate electricity for the residence and must meet applicable fire and electrical code requirements.”
There are no specific technical requirements for photovoltaic systems. But all installed Solar Star Attic Fans must meet applicable fire and electrical code requirements to qualify.
What are the tax incentives for Solar Star Attic Fans?
Homeowners are eligible for tax credits for qualified photovoltaic systems purchased and installed between Jan. 1, 2009, and Dec. 31, 2016**.
For solar photovoltaic (PV) systems, the allowable tax credit is 30% of the qualified PV system expenditures, including both product and installation costs. For solar-powered attic fans, both the solar panel portion of the product and the labor costs associated with the installation can qualify for the tax credit.
Is there a cap on the tax credit?
There is no credit cap for residential photovoltaic systems placed into service after Dec. 31, 2008.
Do Solar Star products installed in my second home or rental property qualify?
Existing homes and new construction qualify. Both primary and secondary homes qualify. Rentals do not qualify.
Are the Solar Star DIY kits eligible?
Yes, Solar Star Attic Fan DIY Kits – both roof and interior mount kits – are eligible as long as they meet the qualifying criteria and all applicable fire and electrical code requirements.
Are Solar Star products eligible even though they aren’t ENERGY STAR® rated?
An ENERGY STAR rating is not required for the photovoltaic system tax credit eligibility program.
What is the difference between a tax deduction and a tax credit?
A tax deduction is subtracted from income before total tax liability is computed. On the other hand, a tax credit is subtracted directly from the total tax liability.
What does the homeowner need to claim the tax credit?
To qualify, tax payers should retain information that includes:
• Receipt with the cost of the system listed
• Receipt with installation fees listed (applies only to Solar Star Attic Fans)
• Date product was placed in service
• Manufacturer Certification Statement
Where do homeowners go for the IRS form?
Click here for IRS Form 5695, which is available on the IRS.gov website.
Are there local incentives for my county and/or city?
Many local utilities provide financial incentives for energy-efficient products. To find out if rebates or incentives are available in your area, visit the ENERGY STAR rebate finder at www.energystar.gov. For additional information, please visit your state energy office website for specific state tax information or go to http://www.dsireusa.org/ to view the database of State Incentives for Renewables and Efficiency.
Prior to December 31, 2013, all products with the ENERGY STAR label were eligible for federal tax credits because of their ability to operate efficiently and lower energy bills. After this date, there may be some ENERGY STAR rated products that do not qualify for federal tax credits. To find out for sure, it’s recommended you visit www.irs.gov or consult a tax professional for advice.
*Solatube International makes no warranty as to the qualification of the products for federal tax credits if there are changes in requirements or applicable law after such date.
Solatube International, Inc. is not a tax advisor. Taxpayers claiming a tax credit should consult a tax professional with any questions. Solatube International is not responsible or liable for the taxpayer’s ability to receive tax credits. This document is not intended to constitute legal or tax advice. More comprehensive information will be made available by the IRS. The user maintains the full and complete responsibility to comply with all codes, laws and regulations applicable to the safe and proper use, handling and installation of the product and should consult with a professional for all construction- and design-related questions. The information contained herein is believed to be accurate as of the time of preparation. However, Solatube International makes no warranty as to the accuracy of this information.