Daylighting Systems and Tax Credits

The various benefits of installing daylighting systems have been well publicized. Broadly speaking, they are:

• An improved ambiance in the house with more natural daylight

• Lower utility bills as there is no need to use electric lighting during the day

• The lower use of electricity means that the house is a greener place

• More exposure to sunlight while indoors offers numerous health benefits

What many people are not aware of is that installing daylighting systems has another major financial benefit – users are entitled to tax credits.

Tax Credit FAQs

• Are tax credits the same as tax deductions? No, they are not. Tax credits are deducted from the total tax liability of the person or entity paying the tax before the liability is calculated. Tax credits, however, are deducted directly from the total tax liability.

• How are tax credits claimed? IRS form 5695 is used to claim tax credits. The form can be downloaded from the IRS website.

• What Documentation is required to file the claim? The following documents are required for claiming tax credits:

• A receipt that shows the total cost of the equipment/product for which the credit is being claimed
• In some cases, the receipt for the installation costs of the equipment/product
• Proof of date of when the equipment/product was placed in service
• The manufacturer’s certification statement

• Are there any local incentives that can be claimed? Local utilities may offer various financial incentives or benefits for the use of energy-efficient products. To know what you may be eligible for,visit the website of your state energy office or local utility. Information may also be obtained from the Energy Star website.

• Are all products with an Energy Star rating eligible for tax credits? Until 2013, all Energy Star labeled products were eligible for tax credits. However, today some equipment/products may not be eligible. Visit the IRS website or consult a tax professional to learn more about specific product eligibility.

Check the Total Cost

While calculating the total cost of using daylighting systems, there are a number of factors to be taken into account. These Include:

• The total cost of the product

• The cost of installation

• The savings on utility costs

• The long-term maintenance costs. This is something people often do not take into account.Installing a daylighting system from a leading manufacturer means that you can be sure of trouble-free service for many years without having to worry about repair or replacement expenses. With less reputed or substandard brands, the risk of losing all the financial benefits due to frequent maintenance or replacement costs increases manifold.

Be Sure Of What You Install

To be sure of buying the best daylighting system for your home, contact the local dealer of the manufacturer that is known to be a brand leader in terms of innovation and quality. That way you can be sure that you are buying the best and most cost-effective daylighting system. The dealer will also be able to do a quick and clean installation, so you do not have to worry about any ancillary installation costs that you have not budgeted for. You will also have access to top-rated light fittings for the daylighting system, so once again quality and reliability is assured.