2022 Tax Credit Information

Information updated 12/30/2022

The Non-Business Energy Property Tax Credits outlined below apply retroactively through 12/31/2022. Updates will be applied for 2023 and remain effective through 12/31/2032.

Tax Credit:  10% of cost up to $500 or a specific amount from $50-$300.
Expires:  December 31, 2022
Details:  Must be placed in service in an existing home which is your principal residence by December 31, 2022.  New construction and rentals do not apply.

Residential Energy Property Costs:

Air Source Heat Pumps

heat umpHeat pumps that are ENERGY STAR certified meet the requirements for this tax credit.

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.

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Central Air Conditioning (CAC)

cacAir conditioners recognized as ENERGY STAR Most Efficient meet the requirements for this tax credit.   To verify tax credit eligibility, ask your HVAC contractor to provide the Manufacturer's Certification Statement for the equipment you plan to purchase.

Tax  Credit Amount:  $300

Requirements
Split Systems:
SEER>= 16
EER >= 13

Package systems:
SEER >= 14
EER >= 12

See definitions.

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Gas, Propane, or Oil Hot Water Boiler

altGas powered boilers that are recognized as ENERGY STAR Most Efficient meet the requirements of this tax credit.

Tax Credit Amount:  $150

Requirements
AFUE >= 95

Tax Credit includes installation costs.

See definitions.

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Gas, Propane or Oil Furnaces and Fans

altGas furnaces that are ENERGY STAR certified (except those for U.S. South only) meet the requirements for the furnace tax credit. Gas and oil furnaces that have earned the ENERGY STAR include fans that meet the requirements of the fan tax credit.

Tax Credit Amount:  $150

Requirements
AFUE >= 95

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Water Heaters (non-solar)

Gas, Oil, Propane Water HeatersGas, Oil, Propane Water Heater

Certain ENERGY STAR certified gas water heaters meet the requirements for this tax credit. Water heaters account for 12% of the energy consumed in your home.

Tax Credit Amount:  $300

Requirements
Uniform Energy Factor (UEF) >= 0.82 OR a thermal efficiency of at least 90%.

See definitions.

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Electric Heat Pump Water HeaterElectric Heat Pump Water Heater

Most ENERGY STAR certified water heaters meet the requirements of this tax credit. Water heaters account for 12% of the energy consumed in your home.

Tax Credit Amount:  $300

Requirements
Uniform Energy Factor (UEF) >= 2.2

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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.

Tax Credit Amount:  $50

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

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Qualified Energy Efficiency Improvements:

Please note: Tax credit DOES NOT INCLUDE INSTALLATION FOR THE FOLLOWING PRODUCTS.

Insulation

altAdding adequate insulation is one of the most cost-effective home improvements that you can do.

Tax Credit Amount:  10% of the cost, up to $500 (NOT INCLUDING INSTALLATION)

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

NOTE: Tax Credit does NOT include installation costs.

See definitions.

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Roofs (Metal & Asphalt)

**Note: ENERGY STAR certification for roof products was withdrawn effective 6/1/22.

This tax credit is for ENERGY STAR certified metal and asphalt roofs with pigmented coatings or cooling granules designed to reduce heat gain. Certified 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.

Tax Credit Amount:  10% of the cost, up to $500 (NOT INCLUDING INSTALLATION)

Requirements
"Metal roofs with appropriate pigmented coatings" and "asphalt roofs with appropriate cooling granules" that also meet ENERGY STAR requirements.

NOTE: Tax Credit does NOT include installation costs.

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Windows, Doors & Skylights

alt text

Windows, doors and skylights that earn the ENERGY STAR save energy, improve comfort and help protect the environment.

Tax Credit Amount: 10% of the cost, up to $500, but windows are capped at $200. (NOT INCLUDING INSTALLATION)

Requirements
Must be ENERGY STAR certified.

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.

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Renewable Energy Tax Credits

Under the Consolidated Appropriations Act of 2021, the renewable energy tax credits for fuel cells, small wind turbines, and geothermal heat pumps now feature a gradual step down in the credit value, the same as those for solar energy systems. 

Tax Credit: 

  • 30% for systems placed in service by 12/31/2019
  • 26% for systems placed in service after 12/31/2019 and before 01/01/2023
  • 22% for systems placed in service after 12/31/2022 and before 01/01/2024

Expires:  December 31, 2023

Details:  Existing homes and new construction qualify.  Both principal residences and second homes qualify. Rentals do not qualify. 

Geothermal Heat Pumps

altGeothermal 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.

Requirements

Must meet the requirements of the ENERGY STAR program which are in effect at the time of the expenditure. Tax credits includes installation costs.

The home served by the system does not have to be the taxpayer's principal residence.

     Water-to-Air      Water-to-Water      Direct Expansion
   Closed Loop:    Closed Loop: EER >= 16
       EER >= 17.1        EER >= 16.1 COP >= 3.6
       COP >= 3.6        COP >= 3.1
   Open Loop:    Open Loop:
       EER >= 21.1        EER >= 20.1
       COP >= 4.1        COP >= 3.5

Definitions: 

  • COP (Coefficient Of Performance) - of a heat pump is the ratio of the change in heat at the "output" (the water reservoir of interest) to the supplied work.
  • EER (Energy Efficient Ratio) - The higher the EER rating, the more energy efficient the equipment is. This can result in lower energy costs. This DOE site can show how to calculate potential energy costs savings of a more efficient unit.

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Small Wind Turbines (Residential)

altA wind turbine collets kinetic energy from the wind and converts it to electricity that is compatible with a home's electrical system.

Requirements
Must generate no more than 100 kilowatts of electricity for residential use. 

Tax credits includes installation costs.

The home served by this system does not have to be the taxpayer's principal residence.

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Solar Energy Systems
Solar Heater

Solar Water Heaters

Solar 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.

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 requirements.

Tax Credit includes installation costs.

The home served by the system does not have to be the taxpayer's principal residence.

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solar panelSolar Panels (Photovoltaic Systems)

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

Requirements

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

The home served by the system does not have to be the taxpayer's principal residence.

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Fuel Cells (Residential Fuel Cell and Microturbine System)

altFuel cells are 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.

Requirements

Tax Credit includes installation costs.

The maximum credit is $500 per half kilowatt (kW) of power capacity.

The fuel cell  must have a nameplate capacity of at least 0.5 kW of electricity using an electrochemical process and an electricity-only generation efficiency greater than 30%.

The home served by the system MUST be the taxpayer's principal residence.

In case of joint occupancy, the maximum qualifying costs that can be taken into account by all occupants for figuring the credit is $1,667 per 0.5 kW. This does not apply to married individuals filing a joint return. The credit that may be claimed by each individual is proportional to the costs he/she paid.

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Biomass Fuel Stoves

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.

**New for 2021:

Beginning in 2021, if you purchase and install a wood or pellet stove or larger residential biomass heating system with a Thermal Efficiency Rating of at least 75%, you will be able to claim a credit that is uncapped and based on the full cost (purchase and installation) of the unit, in the amount of:

  • 26% for systems placed in service between 01/01/2021 through 12/31/2022
  • 22% for systems placed in service between 01/01/2023 and 12/31/2023.

The credit must be claimed on the tax return for the year the product installation is completed. 

Requirements:
Thermal efficiency rating of at least 75%

More Information
 

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Wood Burning Efficiency & Safety

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