Residential Energy Tax Credits have been suspended for the years 2018 to 2025. See below.
Nonbusiness Energy Property Tax Credit (Expired December 31, 2017)
For tax years prior to 2018, equipment and materials can qualify for the Nonbusiness Energy Property Credit only if they meet technical efficiency standards set by the Department of Energy. The manufacturer can tell you whether a particular item meets those standards. For this credit, the IRS distinguishes between two kinds of upgrades.
The first is "qualified energy efficiency improvements," and it includes the following:
- Home insulation
- Exterior doors
- Exterior windows and skylights
- Certain roofing materials
The second category is "residential energy property costs." It includes:
- Electric heat pumps
- Electric heat pump water heaters
- Central air conditioning systems
- Natural gas, propane or oil water heaters
- Stoves that use biomass fuel
- Natural gas, propane or oil furnaces
- Natural gas, propane or oil hot water boilers
- Advanced circulating fans for natural gas, propane or oil furnaces
New energy credits are:
- Solar panels, or photovoltaics, for generating electricity. The electricity must be used in the home.
- Solar-powered water heaters. The water heated by the system must be used inside the home, and at least half of the home's water-heating capacity must be solar. (Solar heaters for swimming pools and hot tubs do not qualify.)
- Wind turbines that generate up to 100 kilowatts of electricity for residential use.
- Geothermal heat pumps that meet federal Energy Star guidelines.
- Fuel cells that rely on a renewable resource (usually hydrogen) to generate power for a home. The equipment must generate at least 0.5 kilowatts of power.
