Conservation Corner – May 2023

Save on Home Efficiency Upgrades

Federal tax credits for home energy improvements were recently expanded and extended. Here’s the latest.

Home energy upgrades are a great way to save money and reduce your environmental footprint, but the initial cost can be expensive. Fortunately, there are a variety of federal tax incentives available to help offset those costs. The Inflation Reduction Act passed in 2022 expanded and extended a series of tax credits for home energy improvements and clean energy upgrades.

Federal tax credits of up to 30% of the cost of qualifying home improvements are available for projects installed between January 1, 2023, and December 31, 2032. Each project is subject to individual maximum amounts, which are specified below. Only improvements made to existing homes that are your principal residence can qualify for these credits.

Home Weatherization

• Exterior doors (maximum $250 per door, $500 total). Eligible doors must be Energy Star ®-certified.
• Windows and skylights ($600 maximum). Windows and skylights must meet Energy Star’s most efficient product requirements.
• Insulation and air sealing ($1,200 maximum). Includes insulation, weatherstripping, caulk and expandable foam. Materials or systems must meet International Energy Conservation Code requirements.

Appliances & Equipment

• Air source and geothermal heat pumps ($2,000 maximum)
• Central air conditioning ($600 maximum)
• Heat pump water heaters ($2,000 maximum)

Qualifying systems must meet efficiency requirements established by the Consortium for Energy Efficiency (CEE). Visit the The Air-Conditioning, Heating, and Refrigeration Institute website, and search for “CEE” to learn more about eligibility and qualifying equipment.

Clean Energy Upgrades

Tax credits for up to 30% of project costs are also available for clean energy upgrades, including solar panels, solar water heaters, small wind turbines, fuel cells and geothermal systems. Battery storage technologies are also eligible. In some situations, solar roofing tiles and solar roofing shingles may also qualify.

There is no overall dollar maximum to the clean energy credit. It is only limited to 30% of qualifying expenses for systems installed between 2023 through 2032.

State and local financial incentives may be available in your area for these and other energy-efficiency upgrades. By taking advantage of these incentives, you can reduce your energy bills and your environmental footprint without making too big a dent in your budget.

If you have more questions, contact your tax professional or refer to the IRS website and search for “tax credits for home energy improvements”.

We also offer some great rebates! Visit our Rebates Offers page to learn more about affordable efficiency upgrades.

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Charlie DeSalvo, Energy Efficiency Specialist

If you have any questions about energy efficiency, email Charlie DeSalvo or call (509) 526-4041.