Georgia Clean Energy Tax Credit

Georgia residents who are interested in installing an alternative, renewable energy system at home can now take advantage of a credit against their Georgia state income tax to help offset part of the upfront costs.

Clean energy income tax credit

Effective July 1, 2008, Georgia taxpayers can claim a credit on their state income tax return for 35% of the purchase and installation cost of a renewable energy system they install at home. Renewable energy systems eligible for the credit include solar water heating, solar space heating, solar photovoltaic electricity-generating systems, wind-powered systems, and Energy Star-certified geothermal heat pumps.

According to the Database of State Incentives for Renewables & Efficiency, leased renewable energy systems also qualify for the tax credit. For leased systems the cost is considered to be eight times the annual rent you pay less any rent income you receive from sub rentals.

The maximum credits that can be claimed are $2,500 for a solar water heating system; $10,500 for a solar photovoltaic, active solar space heating or wind energy system; and $2,000 for an Energy Star-certified geothermal heat pump.

A tax credit is a direct, dollar-for-dollar reduction of your state income tax. If the credit you can claim exceeds your tax liability, you can carry the excess credit forward for five years to be applied against your tax liability in the future.

The tax credit took effect on July 1, 2008 and according to current legislation in Georgia, it will extend until December 31, 2012. The total amount of credits granted in any year will not exceed $2.5 million and credits will be granted on a first-come first-served basis.

Renewable energy system requirements