There are various tax credits available to homeowners and commercial property owners that support energy efficiency and renewable energy improvements. Below is a summary of tax incentives, and website links to more information.
Commercial Property Tax Incentives
New Energy Efficient Home Credit (Section 45L)
Eligible contractors can receive a tax credit for constructing new or significantly renovated energy-efficient homes.
- Single-Family Residences: $2,500 credit per unit for homes meeting Energy Star standards; $5,000 per unit for homes meeting Zero Energy Ready Home (ZERH) standards
- Manufactured Homes: $2,500 per unit for Energy Star compliance; $5,000 per unit for ZERH compliance.
- Multifamily Homes: Varies from $500 to $5,000 per unit based on Energy Star or ZERH compliance and prevailing wage.
Credit for Qualified Commercial Clean Vehicles (Section 45W)
Businesses and tax-exempt organizations can claim a tax credit for purchasing qualifying clean commercial vehicles.
- Eligibility: Vehicles used primarily in the U.S., made by qualified manufacturers, and not previously credited under other clean vehicle programs
- Requirements: Must be plug-in electric vehicles with a minimum battery capacity or fuel cell vehicles
- Credit Amount: Up to $40,000, depending on vehicle weight and fuel use
Renewable Electricity Production Tax Credit (Section 45Y)
This credit supports businesses generating electricity from renewable sources, offering per-kWh incentives for qualified facilities.
- Credit Rates: Up to 2.75 cents/kWh for resources like wind and geothermal; 1.5 cents/kWh for landfill gas and biomass
- Eligibility for Direct Pay: Tax-exempt entities may claim a direct payment if conditions are met
- Energy Community Incentive: 10% increase for projects in specific areas with historical energy reliance
Clean Electricity Investment Tax Credit (Section 48E)
This incentive provides credits for investments in clean energy generation facilities or energy storage, with technology-neutral eligibility criteria.
- Credit Rates: Starts at 6% and may increase to 30% if wage and apprenticeship standards are met
- Energy Community Bonus: 2-10% increase for facilities in designated communities or meeting specific output criteria
Homeowner Tax Incentives
Energy Efficient Home Improvement Credit (Section 25C)
Homeowners may claim a 30% tax credit for eligible energy-efficient improvements on existing homes.
- Eligible Expenses: Energy-efficient improvements (e.g., windows, doors), residential energy property (e.g., heat pumps), and home energy audits
- Credit Limits: Up to $1,200 annually, with sub-limits for certain items ($250 per door, $500 for all doors, $600 for windows, and $150 for audits)
- Annual Claim: The credit is available each year through 2033 for new qualified improvements
Residential Clean Energy Credit (Section 25D)
Homeowners can receive a 30% tax credit for installing qualified clean energy systems between 2022 and 2032.
- Eligible Expenses: Solar panels, solar water heaters, wind turbines, geothermal heat pumps, and battery storage
- Credit Carryover: Any unused credit may carry over to the next tax year
- Lifetime Limit: No dollar limit (except for fuel cell property)
New Clean Vehicle Credit (Section 30D)
This credit offers up to $7,500 for individuals purchasing qualified electric or fuel-cell vehicles for personal or business use.
- Income Requirements: AGI limits of $300,000 for married couples, $225,000 for heads of household, and $150,000 for others
- Vehicle Requirements: Must meet specific battery capacity, weight, price, and origin requirements
- Credit Amount: Base credit is $2,500, with up to $7,500 available depending on vehicle specs
Home Efficiency Rebate Program
This program offers a rebate on qualified energy efficiency upgrades in single-family and multi-family dwellings that achieve at least 20% in energy savings.
- Rebate Amount: The rebate equals the lesser of $2,000 or 50% of the project cost
- Additional Rebates: Projects that achieve greater energy efficiency savings or occur for a low-income household may be eligible for greater rebates
Home Appliance Rebate Program
This program offers a rebate to low- and moderate-income households who purchase high-efficiency equipment.
- Eligibility: Households below 150% of Area Median Income in single- and multi-family dwellings
- Eligible Equipment: Includes heat pump water heaters, heat pumps for space heating and cooling, stoves, clothes dryers, and certain electrical upgrades like service load centers and electric wiring
- Rebate Amounts: Varies depending on the equipment installed and the relevant energy efficiency rating
