• Maximum credit of $2,000 for systems placed in service from January 1, 2006, through December 31, 2008.  
   
• No maximum credit limit for systems placed in service from January 1, 2009, through December 31, 2016.  
   
• In case of joint occupancy, the maximum qualifying cost that can be taken into account by all occupants for figuring the credit is $6,667. This does not apply to married individuals filing a joint return. The credit that may be claimed by each individual is proportional to the costs he or she paid.  
   
• The home served by the system does not have to be the taxpayer’s principal residence.

 Solar water heating property

• Maximum credit of $2000.    No Maximum credit limit - As of Feb. 2009
   
• Systems must be placed in service from January 1, 2006, through December 31, 2016.  
   
• Equipment must be certified for performance by the Solar Rating Certification Corporation (SRCC) or a comparable entity endorsed by the government of the state in which the property is installed.  
   
• At least half the energy used to heat the dwelling's water must be from solar in order for the solar water-heating property expenditures to be eligible.  
   
• The tax credit does not apply to solar water heating property for swimming pools or hot tubs.  
   
• In case of joint occupancy, the maximum qualifying costs that can be taken into account by all occupants for figuring the credit is $6,667. This does not apply to married individuals filing a joint return. The credit that may be claimed by each individual is proportional to the costs he or she paid.  
   
• The home served by the system does not have to be the taxpayer’s principal residence.

 Fuel cell property

• Maximum credit of $500 per half kilowatt (kW).  
   
• Systems must be placed in service from January 1, 2006, through December 31, 2016.  
   
• The fuel cell must have a nameplate capacity of at least 0.5 kW of electricity using an electrochemical process and an electricity-only generation efficiency greater than 30%.  
   
• In case of joint occupancy, the maximum qualifying costs that can be taken into account by all occupants for figuring the credit is $1,667 per half kilowatt. This does not apply to married individuals filing a joint return. The credit that may be claimed by each individual is proportional to the costs he or she paid.  
   
• The home served by the system must be the taxpayer’s principal residence.

 Small wind energy property

• Maximum credit of $500 per half kilowatt, not to exceed $4,000.  
   
• Systems must be placed in service from January 1, 2008, through December 31, 2016.  
   
• In case of joint occupancy, the maximum qualifying costs that can be taken into account by all occupants for figuring the credit is $1,667 per half kilowatt, not to exceed $13,333. This does not apply to married individuals filing a joint return. The credit that may be claimed by each individual is proportional to the costs he or she paid.  
   
• The home served by the system does not have to be the taxpayer’s principal residence.

Geothermal heat pumps

• Maximum credit of $2,000.  
   
• Systems must be placed in service from January 1, 2008, through December 31, 2016.  
   
• The geothermal heat pump must meet the requirements of the Energy Star program which are in effect that the time the installation is completed.  
   
• In case of joint occupancy, the maximum qualifying costs that can be taken into account by all occupants for figuring the credit is $6,667. This does not apply to married individuals filing a joint return. The credit that may be claimed by each individual is proportional to the costs he or she paid.  
   
• The home served by the system does not have to be the taxpayer’s principal residence.

History  
The Energy Policy Act of 2005 (Section 1335) established a 30% tax credit up to $2,000 for the purchase and installation of residential solar electric and solar water heating property and a 30% tax credit up to $500 per 0.5 kilowatt for fuels cells. Initially scheduled to expire at the end of 2007, the tax credits were extended through December 31, 2008 by Section 206 of the Tax Relief and Health Care Act of 2006.  The American Recovery and Reinvestment Act February, 2009 extended the tax credit and lifted the $2000 credit limit.  Therefore you are eligible to receive $3000 credit on a $10,000 solar hot water heating system like the approved VELUX system sold and installed by certified contractors like M4L, Inc.  If you live in Pennsylvania, Maryland, Virginia, New Jersey, or Delaware, get a quick online quote.
 
In October 2008, through the Energy Improvement and Extension Act of 2008 (Division B, Section 106), the tax credits were extended once again –- until December 31, 2016 –- and a new tax credit for small wind energy systems and geothermal heat pump systems was created.