SUMMARY OF FEDERAL TAX CREDITS FOR HOMEOWNERS

The tax credits listed below will help you pay for adding a renewable energy aspect to your home. In the year of installation, your tax preparer should have the final say on how these tax credits are applied to your situation.

Product Category Product Type Tax Credit Specification Tax Credit Notes
Windows & Doors Exterior Windows and Skylights U factor <= 0.30

SHGC <= 0.30
30% of cost, up to $1,5002

Not all ENERGY STAR labeled windows and skylights qualify for tax credit.

More information

Storm Windows Meets IECC1 in combination with the exterior window over which it is installed, for the applicable climate zone 30% of cost, up to $1,5002

Manufacturer Certification Statement3 will list classes of exterior window (single pane, clear glass, double pane, low-E coating, etc.)4 that a product may be combined with to be eligible in specific climate zones.

Exterior Doors U factor <= 0.30

SHGC <= 0.30
30% of cost, up to $1,5002

Not all ENERGY STAR doors will qualify.

More information

Storm Doors In combination with a wood door assigned a default U-factor by the IECC1, and does not exceed the default U-factor requirement assigned to such combination by the IECC. 30% of cost, up to $1,5002  
Roofing Metal Roofs,
Asphalt Roofs
ENERGY STAR qualified 30% of cost, up to $1,5002

All ENERGY STAR metal and asphalt roofs qualify for the tax credit.

Must be expected to last 5 years OR have a 2 year warranty.

Insulation Insulation Meets 2009 IECC & Amendments 30% of cost, up to $1,5002

For insulation to qualify, its primary purpose must be to insulate. (example: vapor retarders are covered, insulated siding does not qualify).

Must be expected to last 5 years OR have a 2 year warranty.

HVAC Central A/C Split Systems:
EER >=13
SEER >= 16

Package systems:
EER >= 12
SEER >= 14
30% of cost, up to $1,5002

For a list of qualified products, go to the Consortium for Energy Efficiency product directory, click on Air Conditioners, then in the “CEE Tier” enter “Residential Advanced Tier 3” for CAC Split Systems, and "Residential Tier 2" for CAC Package Systems and ASHPs.

Note — not all ENERGY STAR products will qualify for the tax credit. View ENERGY STAR criteria.

Air Source Heat Pumps Split Systems:
HSPF >= 8.5
EER >= 12.5
SEER >= 15

Package systems:
HSPF >= 8
EER >= 12
SEER >= 14
30% of cost, up to $1,5002
Natural Gas or Propane Furnace

AFUE >= 95

30% of cost, up to $1,5002

For a list of qualifying products go to the Gas Appliance Manufacturing Association

Not all ENERGY STAR products will qualify for the tax credit. View ENERGY STAR criteria.

Oil Furnace

AFUE >= 90

30% of cost, up to $1,5002
Gas, Propane, or Oil Hot Water Boiler

AFUE >= 90

30% of cost, up to $1,5002
Advanced Main Air Circulating Fan No more than 2% of furnace total energy use 30% of cost, up to $1,5002  
Heaters Gas, Oil, Propane Water Heater Energy Factor >= 0.82
or a thermal efficiency of at least 90%.
30% of cost, up to $1,5002

Not all ENERGY STAR gas storage and gas condensing water heaters will qualify for the tax credit. All ENERGY STAR gas tankless models will qualify.

All ENERGY STAR gas tankless water heaters will qualify.

View ENERGY STAR criteria.

For a partial list of qualifying products go to the Air Conditioning, Heating, and refrigeration Institute (AHRI)

Electric Heat Pump Water Heater Same criteria as ENERGY STAR: Energy Factor >= 2.0 30% of cost, up to $1,5002

All ENERGY STAR electric heat pump water heaters qualify for the tax credit.

Biomass Stove Biomass Stove Stove which burns biomass fuel5 to heat a home or heat water.

Thermal efficiency rating of at least 75% as measured using a lower heating value.
30% of cost, up to $1,5002  
Geo- Thermal Heat Pump Geo- Thermal Heat Pump

Same criteria as ENERGY STAR:

Closed Loop:
EER >= 14.1
COP >= 3.3

Open Loop:
EER >= 16.2
COP >= 3.6

Direct Expansion:
EER >= 15
COP >= 3.5

30% of the cost

All ENERGY STAR geo-thermal heat pumps qualify for the tax credit.

Use IRS Form 5695 PDF

Must be “placed into service” before December 31, 2016. (The IRS defines "placed in service" as when the property is ready and available for use.)

Solar Energy Systems Solar Water Heating

At least half of the energy generated by the “qualifying property” must come from the sun. Homeowners may only claim spending on the solar water heating system property, not the entire water heating system of the household.

The credit is not available for expenses for swimming pools or hot tubs.

The water must be used in the dwelling.

The system must be certified by the Solar Rating and Certification Corporation (SRCC).

30% of cost

All ENERGY STAR solar water heaters qualify for the tax credit.

Use IRS Form 5695 PDF

Must be “placed into service” before December 31, 2016. (The IRS defines "placed in service" as when the property is ready and available for use.)

Photovoltaic Systems Photovoltaic systems must provide electricity for the residence, and must meet applicable fire and electrical code requirement. 30% of cost

Use IRS Form 5695 PDF

Must be “placed into service” before December 31, 2016. (The IRS defines "placed in service" as when the property is ready and available for use.)

Small Wind Energy Systems Residential Small Wind Energy Systems   30% of cost

Use IRS Form 5695 PDF

Must be “placed into service” before December 31, 2016. (The IRS defines "placed in service" as when the property is ready and available for use.)

Fuel Cells Residential Fuel Cell and microturbine system

Efficiency of at least 30% and must have a capacity of at least 0.5 kW.

30% of the cost, up to $1500 per .5 kW of power capacity

Use IRS Form 5695 PDF

Must be “placed into service” before December 31, 2016. (The IRS defines "placed in service" as when the property is ready and available for use.)

Cars Hybrid gasoline-electric, diesel, battery-electric, alternative fuel, and fuel cell vehicles   Based on a formula determined by vehicle weight, technology, and fuel economy compared to base year models

There is a 60,000 vehicle limit per manufacturer before a phase-out period begins. Toyota and Honda have already been phased out. Credit is still available for Ford, GM and Nissan.

For more information visit: Fueleconomy.gov

Use IRS Form 8910 PDF for hybrid vehicles purchased for personal use.

Use IRS Form 3800 PDF for hybrid vehicles purchased for business purposes.

Plug-in hybrid electric vehicles   $2,500–$7,500

The first 250,000 vehicles sold get the full tax credit (then it phases out like the hybrid vehicle tax credits). Effective January 1, 2009.

1Either the 2001 Supplement of the 2000 International Energy Conservation Code or the 2004 Supplement of the 2003 International Energy Conservation Code.

2Subject to a $1,500 maximum per homeowner for all improvements combined.

3A Manufacturer’s Certification is a signed statement from the manufacturer certifying that the product or component qualifies for the tax credit. The IRS encourages manufacturers to provide these Certifications on their website to facilitate identification of qualified products. Taxpayers must keep a copy of the certification statement for their records, but do not have to submit a copy with their tax return.

4Additional information on exterior window features may be viewed at Anatomy of an Energy Efficient Window.

5Biomass Fuel means any plant-derived fuel available on a renewable or recurring basis, including agricultural crops and trees, wood and wood waste and residues (including wood pellets), plants (including aquatic plants), grasses, residues, and fibers.