Residential Tax Benefits
A number of federal tax benefits are available for individual taxpayers installing energy efficiency and renewable energy equipment in their homes. Individual taxpayers purchasing or installing home envelope or home heating/cooling equipment may qualify for a tax credit equal to 30% of the cost of eligible equipment up to a $1,500 tax credit per home.
Eligible home envelope technologies include insulation or sealing, replacement windows, skylights or external doors, and qualifying window films or roofs.
Eligible home heating and cooling investments include high-efficiency furnaces and boilers (annual fuel use efficiency ratings of 95 for gas and propane furnaces and 90 for gas, oil, or propane boilers); high-efficiency air conditioners and heat pumps (meeting the highest tier set by the Consortium for Energy Efficiency as of January 1, 2009); ground source or geothermal heat pumps; biomass stoves with a thermal efficiency of 75% or more that are used to heat a dwelling unit or water for use therein; high-efficiency fans for heating and cooling systems; and high-efficiency gas or propane water heaters.
In addition, individual taxpayers may qualify for onsite renewable energy tax credits for solar energy systems (either solar hot water or solar photovoltaic), small wind systems (up to 100 kilowatts of nameplate capacity), and geothermal heat pumps. The credit is equal to 30% of the cost of the system (including both equipment and labor/installation costs) for systems placed in service before December 31, 2016. Manufacturers of the property must provide a certification to the taxpayer that the equipment is eligible for the credit.
The following resources provide more information about residential tax benefits:
- Database of State Incentives for Renewables & Efficiency
- Tax Incentives Assistance Project
- IRS Code – Sections 168 and 179D