Federal Tax Credits: Fuel Cells (Residential Fuel Cell and Microturbine System)

Fuel 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.

More Information

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

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