Tax Credits and Incentives for Energy Efficiency

Taxpayers who are used to renewable energy for upgrades in their homes to improve energy efficiency may be qualified for certain tax credits.

This Residential Energy Efficiency Property Credit will be 30 percent of the expenditures made by a taxpayer during the taxable year for the following:

  • qualified solar electric systems
  • qualified solar water heaters
  • qualified fuel cell property
  • qualified small wind energy property
  • qualified geothermal heat pumps

For each one-half kilowatt of capacity of the property,  the credit for qualified fuel cell property is limited to $500. The credit is open for properties placed in assistance through December 31, 2021.

Read Also: Tax Refund Dates: When Do You Except to Claim Your IRS Tax Refund? Check Out These Dates!

In addition to the energy efficiency credits, homeowners can also take advantage of the modified and extended Residential Clean Energy credit, which hands over a 30 percent income tax credit for clean energy equipment, such as rooftop solar, wind energy, geothermal heat pumps, and battery storage throughout 2032, stepping down to 22 percentage for 2033 and 2034.

Improvements made in 2022 for Energy Efficiency Tax Credits

As part of the Inflation Reduction Act (IRA) of 2022, the federal tax credits for energy efficiency were extended. So, if you made any qualifying home progress to your primary home after December 31, 2021, you may be eligible to claim them on your taxes when you file for 2022.

Read Also: Low Income May Be Challenging For A Tight Budget – Here Are 8 Low-Income Lenders