Government Incentives
The US government provides substantial tax credits that can offset a major portion of your green energy investment. Here are the two most impactful incentives available to homeowners today.
Residential Clean Energy Credit
The Residential Clean Energy Credit (IRS Form 5695) equals 30% of the total cost of new, qualified clean energy property installed in your primary US home anytime from 2022 through 2032. This is a direct tax credit — meaning it reduces your tax bill dollar-for-dollar, not just your taxable income.
Qualifying investments include solar panels, solar water heaters, small wind turbines, geothermal heat pumps, fuel cells, and battery storage systems. You may also claim the credit on a second home you occupy part of the year (but do not rent).
IRS — Residential Clean Energy Credit
Energy Efficient Home Improvement Credit
Taxpayers who make qualified energy-efficient improvements to their home after January 1, 2023 may qualify for a credit up to $3,200 per year. This credit resets annually, meaning you can claim it in multiple tax years for different improvements.
Sub-limits apply: up to $2,000 for heat pumps, heat pump water heaters, and biomass stoves; up to $1,200 for insulation, windows, doors, and energy audits. Unlike the Clean Energy Credit, this one applies to home improvements rather than new energy systems.
IRS — Energy Efficient Home Improvement Credit
Before You Buy
Not all green energy equipment qualifies automatically. Visit IRS.gov/homeenergy to confirm that the specific product or system you're purchasing meets current eligibility requirements before committing to a purchase.
Visit IRS.gov/homeenergy