You maybe aware that there are federal and state level tax breaks to help homeowners defer the expense of a residential solar system. This is an excellent time to start your own solar project, as these savings can be substantial. Following is some general information on the tax breaks that can be realized. Please check for updated federal and state code though, as updates made be added at any time as things progress in this relatively new area of home improvements tax code.

The federal government has a form (the 5695) that allows you to enter the expense of your residential solar system. Presently, there is a tax credit for up to thirty percent of the total cost, up to $1,500 for existing homes, through 2010 for these types of home improvements. Also, a claim can be made for a solar hot water heater. There was a cap on solar water heaters of $2,000, but now that cap has been removed. Homeowners that utilize solar water heaters can now claim the full thirty percent of the total cost of the solar water heating system. These installations must comply with all fire and electrical safety codes.

The claims for this tax break includes the total cost expended on the solar system and all included hardware required for the installation. Although most solar kits include everything needed for the installation, the consumer can save a lot if doing the installation themselves, as many of the components can be purchased for a lot less if you know where to obtain them.

State Tax Code

Of course each individual state has it’s own tax code regarding home solar (and other) projects and associated tax credits. There is a cataloged database called DSIRE (Database for State Incentives for Renewables and Efficiency) setup at www.dsireusa.org. The information there should be current for your state.

Presently, California has a loan program in place for homeowners to help defer the costs of their residential solar system, and other home improvements that use renewable energy sources. If you own your own home you could qualify for one of these loans. Presently the interest rate is at 8.5%, but due to the degrading economy, this rate could change.

The cost of a commercially installed residential solar system is quite high. Using all of the available tax breaks certainly helps to make your decision to install a residential solar system a little easier though. Choosing a DIY kit and doing the work yourself is another way to lower the cost substantially. However, there is even a way of saving an unbelievable amount, (most) of the total cost of a residential solar system…build your own solar panels!

Many property owners are now electing to save the greatest amount by actually building their own solar panels themselves. This results in being able to build your system slowly, as your funds permit. The solar system can be had for a small fraction of what would normally be spent on commercial products. The money saved is obviously very attractive, but also the property owner has a system that they know very well, can take pride knowing they did it them self, and an installation that they can service and support totally.

Of course as with any home improvement, especially one that can save thousands or tens of thousands of dollars by just owning the home, the value added to your property is very significant.

Please, if helping to save the planet isn’t enough to get you started on your own solar project, consider the savings. It’s possible to totally eliminate your electric bill and even produce more power than you can use. That surplus electricity can then be sold to your utility company (which they MUST buy).

For more information on building your own solar panels and wind turbines, click the banner above, or click the following link on homemade solar panels and wind turbines.