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Tax Credits for Energy Efficiency

If you purchase an energy-efficient product or renewable energy system for your home, you may be eligible for a federal tax credit. Below you will find an overview of the federal tax credits for energy efficiency.

How to Claim Your Tax Credit

  • Claim improvements made in 2009 on your 2009 taxes, filed by April 15, 2010.
  • Use the 2009 version of IRS Tax Form 5695 (PDF 107 KB). Download Adobe Reader.
  • Save your receipts and the Manufacturer Certification Statement for your records.

Products Eligible for Tax Credits Through 2010

The products in this section are eligible for tax credits at 30% of the cost, up to a total credit of $1,500; they must be "placed in service" from January 1, 2009 through December 31, 2010. Select "See Details" under each section below for more information on each product, or see the printable version):

Note that the $1,500 maximum limit is for all of the efficiency measures combined over the two-year 2009-2010 period; you can purchase up to $5,000 worth of products over the two years and get 30% or $1,500 as a tax credit. If you get the full $1,500 tax credit in 2009, you are not eligible for a tax credit on these products in 2010.

The maximum does not apply to geothermal heat pumps, solar energy systems, wind energy systems, and fuel cells, which have no upper limit and are listed below under "Products Eligible for Tax Credits Through 2016." You can receive both the tax credit capped at $1,500 and the tax credit for products with no upper limit. See the ENERGY STAR FAQ for more information on tax credit amounts.

Biomass Stoves

Photo of wood pellets stored in a wood pellet stove.

Credit: 30% of cost, up to $1,500

When and Where:

  • 2009 and 2010 only
  • Primary residence only
  • Existing homes only

  • See details

    Product Requirements More Information
    Biomass stoves

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

    Credit includes installation costs.

    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.

    Learn more about:

HVAC

Photo of a hand pressing buttons on a programmable thermostat.

Credit: 30% of cost, up to $1,500

When and Where:

  • 2009 and 2010 only
  • Primary residence only
  • Existing homes only

Insulation

Photo of a man applying weatherstripping to the edge of a door.

Credit: 30% of cost, up to $1,500

When and Where:

  • 2009 and 2010 only
  • Primary residence only
  • Existing homes only

Roofing

Photo of a man working on a roof.

Credit: 30% of cost, up to $1,500

When and Where:

  • 2009 and 2010 only
  • Primary residence only
  • Existing homes only

  • See details

    Product Requirements More Information
    Metal roofs, asphalt roofs

    All ENERGY STAR qualified metal and reflective asphalt shingles.

    Materials only; installation or labor costs are not eligible for the 30% tax credit.

    The credit is for "Any metal roof or asphalt roof installed on a dwelling unit, but only if such roof has appropriate pigmented coatings or cooling granules which are specifically and primarily designed to reduce the heat gain of such dwelling unit."

    See ENERGY STAR's FAQ for more information on qualifying roofs.

Water Heaters (non-solar)

Photo of a man working on a water heater.

Credit: 30% of cost, up to $1,500

When and Where:

  • 2009 and 2010 only
  • Primary residence only
  • Existing homes only

Windows and Doors

Photo of two windows on a house.

Credit: 30% of cost, up to $1,500

When and Where:

  • 2009 and 2010 only
  • Primary residence only
  • Existing homes only

  • See details

    Product Requirements More Information
    Exterior windows, doors, skylights

    Before June 1, 2009:
    Must meet ENERGY STAR criteria

    After June 1, 2009:
    U factor <= 0.30; SHGC <= 0.30
    (Not all ENERGY STAR products qualify.)

    Learn more about:

    ENERGY STAR labels can be used to document doors, windows, and skylights bought before June 1, 2009.
    Storm windows and doors

    U factor <= 0.30; SHGC <= 0.30
    (when combined with the exterior window or door over which it is installed)

    Learn more about:

    Storm windows and doors must meet the code established by the International Energy Conservation Code (IECC). Ask retailer or manufacturer for a manufacturer's certification statement.

Products Eligible for Tax Credits Through 2016

Tax credits for these products are available at 30% of the cost, with no upper limit, through 2016 (Select "See Details" for more information on each product, or see the printable version).

Geothermal Heat Pump

Photo of two geothermal heat pump—two tall rectangular boxes with pipes and tubes coming out the top of each.

Credit: 30% of cost, with no upper limit

When and Where:

  • Must be "placed in service" by Dec. 31, 2016
  • Primary residences. Vacation homes eligible for partial credit; no rentals.
  • New and existing homes

Solar Energy Systems

Photo of solar panels on the roof of a home.

Credit: 30% of cost, with no upper limit

When and Where:

  • Must be "placed in service" by Dec. 31, 2016
  • Primary residence. Vacation homes eligible for partial credit; no rentals.
  • New and existing homes

  • See details

    Product Requirements More Information
    Solar Water Heater

    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).

    Learn more about solar water heaters.
    All ENERGY STAR solar water heaters qualify.

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

    Tax credits are only available for the solar water heating system property, not the entire water heating system of the household.
    Photovoltaic Systems (Solar Electricity)

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

    Learn more about:

Wind Energy Systems

Photo of a home with a small wind turbine behind the garage.

Credit: 30% of cost, with no upper limit

When and Where:

  • Must be "placed in service" by Dec. 31, 2016
  • Primary residence. Vacation homes eligible for partial credit; no rentals.
  • New and existing homes

Fuel Cells

Photo of a man examining one of three fuel cells. The fuel cells are tall boxes, roughly six feet tall and three feet wide, with a round panel on the front.

Credit: 30% of cost, up to $500 per .5 kW of power capacity

When and Where:

  • Must be "placed in service" by Dec. 31, 2016
  • Primary residence
  • New and existing homes

  • See details

    Product Requirements More Information
    Residential Fuel Cell and Microturbine Systems

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

Vehicle Tax Credits

Tax credits are also available for some vehicles (Select "See Details" for more information on each product, or see the printable version).

Vehicles

Photo of a hybrid electric vehicle.

Credit: Varies, see below.

When:

  • See below; credits phased-out after certain number of vehicles are sold.

  • See details

    Product Requirements More Information
    Hybrid gasoline-electric, diesel, battery-electric, alternative fuel, and fuel cell vehicles

    Credit is based on a formula determined by vehicle weight, technology, and fuel economy compared to base year models.

    There is a 60,000 vehicle limit per manufacturer before a phase-out period begins. See Fueleconomy.gov to find out which vehicles are still eligible.

    Use IRS Form 8910 for hybrid vehicles purchased for personal use. Use IRS Form 3800 for hybrid vehicles purchased for business purposes. The 2009 forms will be available late 2009 or early 2010.
    Plug-in Hybrid Electric Vehicles

    Credit: $2,500-$7,500, based on capacity of the battery system.

    The first 250,000 vehicles sold get the full tax credit (then it phases out like the hybrid vehicle tax credits).

You May Be Eligible for Additional Incentives

The tax credits listed here are federal tax credits.
These can be combined with other state, local, and utility incentives.

Related Links

Note: This summary is for informational purposes only and should not be considered official tax information. Please see the IRS web site for official tax guidance.