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10 Green Energy Tax Credits for Energy Efficiency & Home Improvement




Making your home energy efficient does not only save you money on utility bills, it also reduces your taxes. If you did not know this, now you know. 


There is a wide range of federal tax credits at your disposal, whether you are installing new insulation or a geothermal heat pump. If you are planning to make improvements to your home, or have already done so, take time and go through the long list of available tax credits. Do not shy away from going for the ones you are eligible for. 


1)Tax Credit for Insulation


Addition of an extra insulation can act as a heating and cooling system for your home. Furthermore, it reduces your bills. To qualify for tax credit, you can use materials like spray foam, polystyrene foam boards, or fiberglass. Credit is worth 10% of the total cost of installation. However, it does not include installation and labor costs.. 


2)Tax Credit for Solar Energy Systems


A solar photovoltaic system or water heater may play a big role in reducing energy costs, especially for those who live in sunny regions. If you install a solar system, you will receive a credit of 30% of the cost of purchase and installation. 


To qualify, ensure the Solar Rating and Certification Corporation certifies your solar water heating system. Additionally, ensure you do not use the solar water heater for an outdoor swimming pool. Instead, use it for home water needs. 


3)Tax Credit for Windows, Doors & Skylights


You can also qualify for tax credit by replacing your skylights, windows, and doors with models that are energy-efficient. The tax credit is worth 10% of the cost of items. 


Note that when calculating your credit, you cannot include the cost labor. 


4)Tax Credit for Fuel Cells


Fuel cells convert stored fuel into heat and/or electricity. 


How do fuel cells make your home different from a normal home? Try to imagine the amount of carbon dioxide emitted by a normal home. Now picture that amount being slashed to one-third. Isn’t that amazing? This is what fuel cells do. 


The only drawback with fuel cells is that they are expensive. Nonetheless, you can offset the cost by taking a credit of 30%. 


5)Tax Credit for Non-Solar Water Heaters


If you need a new water heater, but you do not want to go solar, there is no problem. You can still get a tax credit worth $300 of the energy-efficient model you opt for. 


6)Tax Credit for Reflective Roofs


You may also choose to paint your roof using approved granules or paint. This not only reduces your home’s temperature, it also reduces your tax bill. You can receive a tax credit worth 10% of the cost of supplies up to $1,500.


7)Tax Credit for HVAC Systems & Upgrades


Improving the efficiency of your heating and cooling systems ensures a reduction in your energy bills


Those who qualify get to receive tax credits ranging from $50 to $300. 


•Biomass stoves

•Hot water boiler, oil, propane, or gas furnace 

•Central air conditioning systems

•Air source heat pump 

•Advanced main air circulating fan 


8)Tax Credit for Thermostats


Apart from reducing your bills, using a thermostat also nets you a tax credit. 


9)Tax Credit for Residential Wind Turbines


A small wind turbine can produce enough electricity for your primary or secondary residence, especially if you live in a windy area. Installing a turbine allows you to take a credit of 30% of the cost of installation, labor and parts. 


However, you cannot receive a credit if the capacity is more than 100 kilowatts. The turbine must also not be installed at a rental property. 


10)Tax Credit for Geothermal Heat Pumps


A geothermal heat pump enables you to use heat generated by the earth’s core. Since purchase and installation is expensive, it is a relief to receive a tax credit of 30% (with no upper limit) of the cost of labor, installation and parts. 


Isn’t it awesome to save the environment while at the same time-saving money? Always consult with the salesman before making purchases so that you only buy materials that will enable you to qualify for tax credits. 








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