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Which Home Improvements Qualify for Energy Tax Credits?

energy tax credits

If you’ve made improvements to your home in order to make it more energy efficient, you may qualify for a tax credit that could save you some money. Through 2016, there are two credits that the IRS recognizes when it comes to home energy: the Residential Energy Efficiency Property Credit and the Nonbusiness Energy Property Credit. These credits can be between 10% and 30% of the installation costs and credit limitations can vary. (For more information, visit energystar.gov.)

Renewable Energy

When it comes to solar, wind, geothermal, and fuel cell home improvements (under the Residential Energy Efficiency Property Credit), there are several that qualify for an energy tax credit:

Solar

  • Solar panels, or photovoltaics, that generate electricity for use in the home.
  • Solar-powered water heaters for use in the home. (At least half of the home’s water-heating capacity must be solar.) Solar heaters for swimming pools and hot tubs do not qualify.

Wind

  • Wind turbines that generate up to 100 kilowatts of electricity for use in the home.

Geothermal

  • Geothermal heat pumps that meet federal Energy Star guidelines.

Fuel Cells

  • Fuel cells that rely on a renewable resource (usually hydrogen) to generate power for use in the home. (Must generate at least 0.5 kilowatts of power.)

Upgrades

When it comes to the Nonbusiness Energy Property Credit, some equipment and materials can qualify, as long as they meet technical efficiency standards. For this credit, there are two kinds of upgrades:

Energy efficiency improvements:

  • Home insulation
  • Exterior doors
  • Exterior windows and skylights (up to $200 credit)
  • Certain roofing materials

Energy property costs:

  • Electric heat pumps
  • Electric heat pump water heaters
  • Central air conditioning systems
  • Natural gas, propane or oil water heaters
  • Biomass-fueled stoves
  • Natural gas, propane, or oil furnaces (up to $150 credit)
  • Natural gas, propane, or oil hot water boilers (up to $150 credit)
  • Advanced circulating fans for natural gas, propane, or oil furnaces (up to $50 credit)

If you’re interested in any of these tax credits, we offer a variety of heating and cooling services that can help you qualify. Visit our services page or give us a call to find out how we can make your home more energy efficient.