If you have made upgrades to your home that utilize renewable energy, you may be eligible for a tax credit to help offset what you spent for the home improvement. The Energy Efficient Improvement Credit may qualify you for a tax credit up to $3,200 if you make the appropriate energy-efficient improvements to your home after January 1, 2023. These credits can be claimed though 2032.You can file for the credits by filing Form 5695 with your tax return.
Equipment that uses solar, wind, geothermal and fuel-cell technology qualifies for the Residential Renewable Energy Tax Credit. This includes:
- Solar panels, or Photovoltaics for generating electricity. (Electricity must be used in the home)
- Solar-powered water heaters. The water heated by the system must be used in the home and must make up at least half of the home’s water-heating capacity. Solar heaters for things like hot tubs and swimming pools 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.
The U.S. Department of Energy says that you can claim the Residential Energy Efficiency Property Credit for these types of equipment in both your principal and secondary homes, with the exception of fuel-cell equipment which qualifies only if installed in your primary residence.
The credit you will receive is equal to 30% of the cost, including installation. While there is no limit on the amount of credit you can receive for solar, wind, and geothermal equipment, the maximum tax credit for fuel cells is capped at $500 for each half-kilowatt of power capacity or $1000 for each kilowatt.
Going green will not only help save the planet, it will help you save some money as well!
If you’re thinking about selling or buying a home in the New River Valley area, contact professional, experienced Realtor Desi Sowers and let her assist you with all your real estate needs. Give her a call today at 540-320-1328!