Home > Federal Tax Credits for Energy Efficiency

Page Last Updated: 1-30-2013

Federal Tax Credits for Consumer 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 is included in the 2012 and 2013 Federal Tax Credit?

The following applies to the 6 product categories below:

Tax Credit:
10% of cost up to $500 or a specific amount from $50–$300
Expires:
December 31, 2013
Details:
Must be an existing home & your principal residence. New construction and rentals do not qualify.
  • Biomass Stoves

    • Biomass StoveBiomass 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.

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      Tax Credit Amount: $300
      Requirements

      Thermal efficiency rating of at least 75%

  • Heating, Ventilating, Air Conditioning (HVAC)

    • 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.

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      Tax Credit Amount: $50
      Requirements

      Must use no more than 2% of the furnace's total energy.

      More Information
    • Air Source Heat Pumps

      Air Source Heat PumpsHeat 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.

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      Tax Credit Amount: $300
      Requirements

      Split Systems:
      HSPF ≥ 8.5
      EER ≥ 12.5
      SEER ≥ 15

      Package systems:
      HSPF ≥ 8
      EER ≥ 12
      SEER ≥ 14

      See Definitions.

      More Information
    • Central Air Conditioning (CAC)

      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.

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      Tax Credit Amount: $300
      Requirements

      Split Systems:
      SEER ≥ 16
      EER ≥ 13

      Package systems:
      SEER ≥ 14
      EER ≥ 12

      See definitions.

      More Information
    • Gas, Propane, or Oil Hot Water Boiler

      Gas, Propane, or Oil Hot Water BoilerThese are heating units that use water circulated throughout the home in a system of baseboard heating units, radiators, and/or in-floor radiant tubing.

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      Tax Credit Amount: $150
      Requirements

      AFUE ≥ 95

      Tax Credit includes installation costs.

      See definitions.

      More Information
    • Natural Gas, Propane or Oil Furnace

      Natural Gas or Propane FurnaceA furnace uses the combustion of fuel and air to create heat.

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      Tax Credit Amount: $150
      Requirements

      AFUE ≥ 95

      More Information
  • Insulation

  • Roofs (Metal & Asphalt)

    • RoofsQualified 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.

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      Tax Credit Amount: 10% of the cost, up to $500
      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.

      More Information
  • Water Heaters (non-solar)

    • Gas, Oil, Propane Water Heater

      Gas, Oil, Propane Water HeaterWater heating can account for 14%�25% of the energy consumed in your home.

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      Tax Credit Amount: $300
      Requirements

      Energy Factor ≥ 0.82 OR a thermal efficiency of at least 90%.

      See definitions.

      More Information
    • Electric Heat Pump Water Heater

      Electric Heat Pump Water HeaterWater heating can account for 14%�25% of the energy consumed in your home.

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      Tax Credit Amount: $300
      Requirements

      Energy Factor ≥ 2.0

      More Information
  • Windows & Doors

    • Windows, Doors, Skylights

      Windows, Doors, SkylightsEnergy efficient windows, doors and skylights can reduce energy bills.

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      Tax Credit Amount: 10% of the cost, up to $500, but windows are capped at $200.
      Requirements

      Must be ENERGY STAR qualified.

      You do not have to replace all the windows/doors/skylights in your home to qualify. And it doesn't need to be a replacement either - installing a new window where there wasn't one previously (like in an addition) qualifies.

      Tax Credit does NOT include installation costs.

      More Information

The following applies to the 3 product categories below:

Tax Credit:
30% of cost with no upper limit
Expires:
December 31, 2016
Details:
Existing homes & new construction qualify. Both principal residences and second homes qualify. Rentals do not qualify.
  • Geothermal Heat Pumps

    • Geothermal Heat PumpsGeothermal heat pumps are similar to ordinary heat pumps, but use the ground instead of outside air to provide heating, air conditioning and, in most cases, hot water. Because they use the earth's natural heat, they are among the most efficient and comfortable heating and cooling technologies currently available.

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      Requirements

      Must meet the requirements of the ENERGY STAR program which are in effect at the time of the expenditure.

      Water-to-Air
         Closed Loop:
            EER ≥ 17.1
            COP ≥ 3.6
         Open Loop:
            EER ≥ 21.1
            COP ≥ 4.1

      Water-to-Water
         Closed Loop:
            EER ≥ 16.1
            COP ≥ 3.1
         Open Loop:
            EER ≥ 20.1
            COP ≥ 3.5

      Direct Expansion:
          EER ≥ 16
          COP ≥ 3.6

      Tax Credit includes installation costs.

      See definitions.

  • Small Wind Turbines (Residential)

    • Small Wind TurbineA wind turbine collects kinetic energy from the wind and converts it to electricity that is compatible with a home's electrical system.

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      Requirements

      Must have a nameplate capacity of no more than 100 kilowatts.

      Tax Credit includes installation costs.

      More Information
  • Solar Energy Systems

    • Solar Water Heaters

      Solar Water HeatersSolar water heaters come in a wide variety of designs, all including a collector and storage tank, and all using the sun's thermal energy to heat water. Solar water heaters are typically described according to the type of collector and the circulation system.

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      Requirements

      At least half of the energy generated by the "qualifying property" must come from the sun. The system must be certified by the Solar Rating and Certification Corporation (SRCC) or a comparable entity endorsed by the government of the state in which the property is installed.

      Note: The credit is not available for expenses for swimming pools or hot tubs. The water must be used in the dwelling.

      Photovoltaic systems must provide electricity for the residence, and must meet applicable fire and electrical code requirement.

      Tax Credit includes installation costs.

    • Solar Panels (Photovoltaic Systems)

      Solar PanelsSolar Panels or Photovoltaic Systems are solar cells that capture light energy from the sun and convert it directly into electricity.

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      Requirements

      Photovoltaic systems must provide electricity for the residence, and must meet applicable fire and electrical code requirement.

      More Information

The following applies to the single product category below:

Tax Credit:
Credit Details: 30% of the cost, up to $500 per .5 kW of power capacity
Expires:
December 31, 2016
Details:
Existing homes & new construction qualify. Must be your principal residence. Rentals and second homes do not qualify.
  • Fuel Cells (Residential Fuel Cell and Microturbine System)

    • Fuel CellsFuel cells are an important enabling technology for the hydrogen economy and have the potential to revolutionize the way we power our nation, offering cleaner, more-efficient alternatives to the combustion of gasoline and other fossil fuels.

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      Requirements

      Efficiency of at least 30% and must have a capacity of at least 0.5 kW.

      Tax Credit includes installation costs.

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