Federal Tax Credits for Residential Renewable Energy Installations
What do these credits count towards?
The benefits listed below will cover installations of solar electric, solar water-heating, fuel cell, small wind, and geothermal heat pump systems in your property.
For information on installations on a commercial scale, please reference our page on Federal Tax Credits for Commercial Renewable Energy Installations.
What are the benefits of my installation?
Tax credits and regulations differ based on which installation you’ve implemented and when it was deemed serviceable.
Solar Electric & Solar Water-Heating Systems
Systems must be placed in service between 1/1/2006 and 12/31/2021. There is no maximum credit for systems placed in service after 2008. Your tax credit will vary based on when your system was installed. The credit covers product and installation costs.
- Placed in service by 12/31/2019: 30% credit
- Placed in service between 1/1/2020-12/31/2020: 26% credit
- Placed in service between 1/1/2021-12/31/2021: 22% credit
Solar Water-Heating Systems have additional requirements. They must be approved by either the Solar Rating Certification Corporate (SRCC) or a comparable entity. At least half of the energy used in the residence music be from solar. The credits are not applicable for systems hooked up to swimming pools or hot tubs.
Fuel Cell Systems
Systems must be placed in service between 1/1/2006 and 12/31/2016. The maximum credit for fuel cells is $500 per half kilowatt. Credits can only be applied to these systems if they are in the owner’s primary residence.
Small Wind Systems
Systems must be placed in service between 1/1/2008 and 12/31/2016. Like solar, there is no maximum credit for systems placed in service after 2008.
Geothermal Heat Pumps
Systems must be placed in service between 1/1/2008 and 12/31/2016. Like solar and wind, there is no maximum credit for systems placed in service after 2008. These pumps must meet Energy Star standards to be approved for the credit.
We cannot provide legal advice to our customers. If you have any questions or concerns specific to your installation, seek the counsel of your tax preparer or other trusted adviser.