Professional Remodeling & Repair Services

Federal Tax Credits for Energy Efficiency*

UPDATED July 14, 2009

Quick link to this page: energystar.gov/taxcredits

**Please note, not all ENERGY STAR qualified homes and products qualify for a tax credit. These tax credits are available for a number of products at the highest efficiency levels, which typically cost much more than standard products. If, for whatever reason, you decide not to purchase a product covered by the tax credit, you may still consider purchasing an ENERGY STAR product. 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.

Tax Credits for Consumers:

Home Improvements

Tax credits are now available for home improvements:

  • must be "placed in service" from January 1, 2009 through December 31, 2010
  • must be for taxpayer's principal residence, EXCEPT for geothermal heat pumps, solar water heaters, solar panels, and small wind energy systems (where second homes qualify)
  • $1,500 is the maximum total amount that can be claimed for all products placed in service in 2009 & 2010 for most home improvements, EXCEPT for geothermal heat pumps, solar water heaters, solar panels, fuel cells, and small wind energy systems which are not subject to this cap, and are in effect through 2016
  • must have a Manufacturer Certification Statement to qualify
  • for record keeping, save your receipts and the Manufacturer Certification Statement
  • improvements made in 2009 will be claimed on your 2009 taxes (filed by April 15, 2010) — use IRS Tax Form 5695 (2009 version) — it will be available late 2009 or early 2010
  • If you are building a new home, you can qualify for the tax credit for geothermal heat pumps, photovoltaics, solar water heaters, small wind energy systems and fuel cells, but not the tax credits for windows, doors, insulation, roofs, HVAC, or non-solar water heaters. More.
SUMMARY OF TAX CREDITS FOR HOMEOWNERS
Product Type Tax Credit Specification Tax Credit Notes
Insulation Meets 2009 IECC & Amendments 30% of cost, up to $1,5001

For insulation to qualify, its primary purpose must be to insulate (example: insulated siding does not qualify).

Check to see if you have Home Performance with ENERGY STAR in your areas. Adding insulation to your home is covered.

Exterior Windows and Skylights Before June 1, 2009:
Must meet ENERGY STAR criteria

After June 1, 2009:
U factor <= 0.30

SHGC <= 0.30
30% of cost, up to $1,5001

Not all ENERGY STAR labeled windows and skylights qualify for tax credit.

More information

Storm Windows In combination with the exterior window over which it is installed:
  1. has a U-factor and SHGC of 0.30 or below
  2. Meets the IECC
30% of cost, up to $1,5001

FAQ on storm doors and storm windows.

Exterior Doors Before June 1, 2009:
Must meet ENERGY STAR criteria

After June 1, 2009:
U factor <= 0.30

SHGC <= 0.30
30% of cost, up to $1,5001

Not all ENERGY STAR doors will qualify.

More information

Storm Doors In combination with a wood door over which it is installed:
  1. has a U-factor and SHGC of 0.30 or below
  2. Meets the IECC
30% of cost, up to $1,5001

FAQ on storm doors and storm windows.

Metal Roofs,
Asphalt Roofs
All ENERGY STAR qualified metal and reflective asphalt shingles 30% of cost, up to $1,5001

FAQ on roofs that qualify for the tax credit

Central A/C Split Systems:
EER >=13
SEER >= 16

Package systems:
EER >= 12
SEER >= 14
30% of cost, up to $1,5001

FAQ on Central ACs that qualify for the tax credit

FAQ on Air Source Heat Pumps that qualify for the tax credit

Note — not all ENERGY STAR products will qualify for the tax credit. View ENERGY STAR criteria.

Air Source Heat Pumps Split Systems:
HSPF >= 8.5
EER >= 12.5
SEER >= 15

Package systems:
HSPF >= 8
EER >= 12
SEER >= 14
30% of cost, up to $1,5001
Natural Gas or Propane Furnace

AFUE >= 95

30% of cost, up to $1,5001

FAQ on Furnaces and Boilers that qualify for the tax credit

Note — not all ENERGY STAR products will qualify for the tax credit. View ENERGY STAR criteria for furnaces, boilers.

Oil Furnace

AFUE >= 90

30% of cost, up to $1,5001
Gas, Propane, or Oil Hot Water Boiler

AFUE >= 90

30% of cost, up to $1,5001
Advanced Main Air Circulating Fan No more than 2% of furnace total energy use. 30% of cost, up to $1,5001

Read this FAQ if the fan qualifies, but the furnace does not.

Gas, Oil, Propane Water Heater Energy Factor >= 0.82
or a thermal efficiency of at least 90%.
30% of cost, up to $1,5001

FAQ on Water Heaters that qualify for the tax credit

View ENERGY STAR criteria for water heaters.

Electric Heat Pump Water Heater Same criteria as ENERGY STAR: Energy Factor >= 2.0 30% of cost, up to $1,5001
Biomass Stove

Stove which burns biomass fuel to heat a home or heat water.

Thermal efficiency rating of at least 75% as measured using a lower heating value.

30% of cost, up to $1,5001 FAQ on biomass stoves.
Geo-Thermal Heat Pump

Same criteria as ENERGY STAR:

Closed Loop:
EER >= 14.1
COP >= 3.3

Open Loop:
EER >= 16.2
COP >= 3.6

Direct Expansion:
EER >= 15
COP >= 3.5

30% of the cost

All ENERGY STAR geo-thermal heat pumps qualify for the tax credit.

Must be “placed into service” before December 31, 2016.

Solar Water Heating

At least half of the energy generated by the “qualifying property” must come from the sun. Homeowners may only claim spending on the solar water heating system property, not the entire water heating system of the household.

The credit is not available for expenses for swimming pools or hot tubs.

The water must be used in the dwelling.

The system must be certified by the Solar Rating and Certification Corporation (SRCC).

30% of cost

All ENERGY STAR solar water heaters qualify for the tax credit.

Must be placed in service before December 31, 2016.

Photovoltaic Systems Photovoltaic systems must provide electricity for the residence, and must meet applicable fire and electrical code requirement. 30% of cost

Must be placed in service before December 31, 2016.

Residential Small Wind Turbines Has nameplate capacity of not more than 100 kilowatts. 30% of cost

Must be placed in service before December 31, 2016.

1Subject to a $1,500 maximum per homeowner for all improvements combined.

*Disclaimer: This site does not claim to contain all of the information that you need in order to make an informed decision about tax credits or other tax related issues. Information contained herein was taken from the official government site (energystar.gov/taxcredits) on 8/10/2009 and is provided strictly for informational purposes. However, because the government website may have changed from the time that this information was gathered it is important that you refer to that site as your official source of information

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