Federal Tax Credits for Consumer Energy Efficiency

The Federal Government offers several tax credits for installing energy efficient devices in your home. There are different levels of tax credits depending on if the house is an existing home, new construction, or second home. Rental units do not qualify for any of these tax credits. If you are renovating or adding on to your existing home, you can also take advantage of these credits.

You can receive a tax credit of 30% of the purchase and installation cost up to a $1500 limit if you install Energy Star listed doors and windows, add Energy Star certified insulation, or an Energy Star asphalt or metal roof. These items must be purchased after June 1, 2009 and meet the 2009 Energy Star requirements. You can also install energy efficient heating and air conditioning system or biomass stove in your home to receive the credit. This tax credit is available for an existing home which is your principle residence. The deadline to take advantage of this credit is December 31, 2010.

Adding a geothermal heat pump, residential small wind turbine, or solar energy system to your home can net you a tax credit of 30% of the purchase and installation cost with no upper limit. This credit is available for existing homes and new constructions. The credit can also be applied to energy efficient systems to both a principle residence and second home. The deadline to apply for this credit is December 31, 2016.

A new and upcoming technology is the residential fuel cell and microturbine system. Fuel cells use hydrogen to produce clean energy. You can receive a 30% credit up to $500 per .5 kilowatt of power capacity. This credit includes both the purchase and installation costs of the technology. Both new and existing homes qualify but rentals and second properties do not. This tax credit expires on December 31, 2016.

Adding energy efficient elements to your home can have a higher initial cost, but these tax credits make it easier and faster to recoup your investment. Taking advantage of the energy efficiency tax credits will help you save money now and save even more money in the long run.