An energy tax credit is a credit that can be applied to the annual or quarterly taxes for an individual or business. Energy tax credits are rewarded to a business or individual in the event that they make certain energy saving improvements to their home or place of business. For example, a business may install solar panels above their parking structure, or a family may renovate their home to use double paned, insulated windows.
These improvements lessen a building's demand for power resources, such as heating gas and electricity. This can help lower the total burden on the power grid, which is something that the government wants to promote. By lowering the demand on power, less coal and natural gas has to be mined from the earth, and less raw material has to be imported from abroad. This can help the government maintain a favorable ratio between imports and exports.
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