Yes. The federal government offers a 30% tax credit on the purchase and installation of solar electric (photovoltaics) and solar hot water products (except those for pools and hot tubs), for up to $2,000 of the cost of each. The credit is set to expire December 31, 2008. To qualify, you'll need to retain your receipts for recordkeeping and fill out IRS form 5695 (pdf).

Many states also offer incentives for wind and solar-power upgrades, such as income tax credits and property tax exemptions for the appraised value of the alternative energy systems. To find out if your state is one of them, go to the Database of State Incentives for Renewables and Efficiency website - this non-profit keeps track of the myriad tax incentives across the nation, in addition to rebate offers from utilities.

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