Energy Tax Credit: Which home improvements qualify?

Residential Renewable Energy Tax Credit

• Solar panels, or photovoltaics, for generating electricity. The electricity must be used in the home.
• Solar-powered water heaters. The water heated by the system must be used inside the home, and 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 turbines that generate up to 100 kilowatts of electricity for residential use.
• Geothermal heat pumps that meet federal Energy Star guidelines.
• Fuel cells that rely on a renewable resource (usually hydrogen) to generate power for a home. The equipment must generate at least 0.5 kilowatts of power.

Renewable energy tax credit details

• The credit is equal to 30% of the cost, including installation.
• There is no upper limit on the amount of the credit for solar, wind and geothermal equipment.
• The maximum tax credit for fuel cells is $500 for each half-kilowatt of power capacity, or $1,000 for each kilowatt.
  • For example, a fuel cell with a 5 kW capacity would qualify for 5 x $1,000 = $5,000 tax credit.

Nonbusiness Energy Property Tax Credit (Extended through December 31, 2019)

• Home insulation
• Exterior doors
• Exterior windows and skylights
• Certain roofing materials

• Electric heat pumps
• Electric heat pump water heaters
• Central air conditioning systems
• Natural gas, propane or oil water heaters
• Stoves that use biomass fuel
• Natural gas, propane or oil furnaces
• Natural gas, propane or oil hot water boilers
• Advanced circulating fans for natural gas, propane or oil furnaces

Details of the Nonbusiness Energy Property Credit (Extended through December 31, 2019)

• A maximum of $200 can be for windows.
• The maximum tax credit for a furnace circulating fan is $50.
• The maximum credit for a furnace or boiler is $150.
• The maximum credit for any other single residential energy property cost is $300.

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