Federal Tax Credits for Consumer Energy Efficiency
If you purchase an energy-efficient product or renewable energy system for your home, you may be eligible for a federal tax credit. Below you will find an overview of the federal tax credits for energy efficiency.
Please note, not all ENERGY STAR qualified products qualify for a tax credit. ENERGY STAR distinguishes energy efficient products which, although they may cost more to purchase than standard models, will pay you back in lower energy bills within a reasonable amount of time, without a tax credit.
What You Need to Know
What is included in the Federal Tax Credit?
How do I apply for my Federal Tax Credit?
Top ten Frequently Asked Questions
What is included in the Tax Credit?
Biomass stoves burn biomass fuel to heat a home or heat water. Biomass fuel includes agricultural crops and trees, wood and wood waste and residues (including wood pellets), plants (including aquatic plants), grasses, residues, and fibers.
Advanced Main Air Circulating Fan
An Advanced Main Air Circulating Fan is an efficient fan, or blower motor which blows the air that your furnace heats up through the duct system.
Requirements
Must use no more than 2% of the furnace's total energy. Note: If the fan is qualified, but the furnace is not, you will not be able to take 30% off the cost of the entire furnace. Ask your HVAC contractor to break out the cost of the fan in your bill. You can get a 30% tax credit on the cost of the fan alone.
Tax Credit includes installation costs.
More Information
Advanced main air circulating fan FAQ's
Air Source Heat Pumps
Heat pumps offer an energy-efficient alternative to furnaces and air conditioners in moderate climates. Like your refrigerator, heat pumps use electricity to move heat from a cool space into a warm, making the cool space cooler and the warm space warmer. During the heating season, heat pumps move heat from the cool outdoors into your warm house; during the cooling season, heat pumps move heat from your cool house into the warm outdoors. Because they move heat rather than generate heat, heat pumps can provide up to 4 times the amount of energy they consume.
Requirements Split Systems: HSPF ≥ 8.5 EER ≥ 12.5 SEER ≥ 15
Package systems: HSPF ≥ 8 EER ≥ 12 SEER ≥ 14
Tax Credit includes installation costs.
Central Air Conditioning (CAC)
The best way to find tax credit eligible CACs is to ask your HVAC Contractor (Heating Ventilation and Air Conditioning). To verify tax credit eligibility, ask your HVAC contractor to provide the Manufacturer Certification Statement for the equipment you plan to purchase. Or, search the Manufacturer's website.
Requirements Split Systems: SEER ≥ 16 EER ≥ 13
Package systems: SEER ≥ 14 EER ≥ 12
Tax Credit includes installation costs.
Gas, Propane, or Oil Hot Water Boiler
These are heating units that use water circulated throughout the home in a system of baseboard heating units, radiators, and/or in-floor radiant tubing.
Requirements AFUE ≥ 90
Tax Credit includes installation costs.
Natural Gas or Propane Furnace
A furnace uses the combustion of fuel and air to create heat.
Requirements AFUE ≥ 95
Tax Credit includes installation costs.
Oil Furnace
A furnace uses the combustion of fuel and air to create heat.
Requirements AFUE ≥ 90
Tax Credit includes installation costs.
Adding adequate insulation is one of the most cost-effective home improvements that you can do.
Requirements
Typical bulk insulation products can qualify, such as batts, rolls, blow-in fibers, rigid boards, expanding spray, and pour-in-place.
Products that air seal (reduce air leaks) can also qualify, as long as they come with a Manufacturers Certification Statement, including:
- Weather stripping
- Spray foam in a can, designed to air seal
- Caulk designed to air seal
- House wrap
Tax Credit does NOT include installation costs. But, you can install the insulation/home sealing yourself and get the credit.
Qualified roof products reflect more of the sun's rays, which can lower roof surface temperature by up to 100F, decreasing the amount of heat transferred into your home.
Requirements
"Metal roofs with appropriate pigmented coatings" and "asphalt roofs with appropriate cooling granules" that also meet ENERGY STAR requirements.
Tax Credit does NOT include installation costs.
Gas, Oil, Propane Water Heater
Water heating can account for 14%–25% of the energy consumed in your home.
Requirements
Energy Factor ≥ 0.82 OR a thermal efficiency of at least 90%.
Tax Credit includes installation costs.
Electric Heat Pump Water Heater
Water heating can account for 14%–25% of the energy consumed in your home.
Requirements
Energy Factor ≥ 2.0
Tax Credit includes installation costs.
Windows, Doors, Skylights
Energy efficient windows, doors and skylights can reduce energy bills.
Requirements
U factor <=0.30 SHGC <=0.30
Tax Credit does NOT include installation costs.
Storm Windows & Doors
A less expensive approach to replacing old windows/doors, is to use storm windows to improve energy efficiency. When installed in combination with older, less efficient window/door, storm windows/doors can enhance efficiency by creating another barrier between the interior of you home and the weather outside.
Requirements
In combination with the exterior window/door over which it is installed:
U-factor and SHGC of 0.30 or below Must meet the IECC
Tax Credit does NOT include installation costs.
