2016 Federal Income Tax Credits

A number of tax credits for residential energy efficiency have been renewed. These tax credits are available for purchases made in 2016, as well as retroactive to purchases made in 2015.

  • Geothermal heat pumps can qualify for a tax credit of 30% of the cost (including installation costs) with no upper limit.
  • Solar Energy Systems are available at 30% through December 31, 2019. The credit decreases to 26% for tax year 2020; drops to 22% for tax year 2021 then expires December 31, 2021.
  • Air Source Heat Pumps – Tax Credit Amount: $300. Heat pumps that are ENERGY STAR certified meet the requirements for this tax credit.
  • Air conditioners recognized as ENERGY STAR Most Efficient 2016 meet the requirements for this $300 tax credit with a minimum 16 SEER for a split system and a 14 SEER for a package system.
  • Insulation – Tax Credit Amount: 10% of the cost, up to $500.
  • Water Heaters (non-solar) – ENERGY STAR certified electric water heaters meet the requirements for this tax credit – Tax Credit Amount: $300.
  • Roofs – This 10% of cost tax credit is for ENERGY STAR certified metal and asphalt roofs with pigmented coatings or cooling granules designed to reduce heat gain.
  • Windows, Doors and Skylights – Tax Credit Amount: 10% of cost (not including installation costs), up to $200 for windows and skylights; up to $500 for doors. (Cumulative maximum tax credits for windows, doors, and skylights for all years combined is $500)

For more information, visit www.energystar.gov/about/federal_tax_credits/


Also, don’t forget about CAEC’s rebate program on electric hot water heaters and heat pumps to help extend those energy improvement dollars!