What Is the Alternative Energy Tax Credit?

Alternative Energy Tax Credits for Homeowners

Residential Clean Energy Credit (30%)

Claim 30% of the cost of:

• Solar electric systems: Panels, inverters, mounting hardware
• Solar water heating: Must be used for home, not pools/hot tubs
• Fuel cells: $500 per 0.5 kW capacity
• Wind turbines: Small residential wind energy systems
• Geothermal heat pumps: Must meet Energy Star requirements
• Battery storage: Must be charged from renewable sources

Key Facts

• No dollar cap
• The unused credit carries forward to the next tax year
• Available through 2032 at 30%; phases down to 26% (2033), 22% (2034), then 0%
• Must be for your primary or secondary home

What's Included in the Cost

• Equipment
• Labor for installation
• Wiring, piping, and assembly

Claiming the Credit

File Form 5695 with your tax return.

State Credits

Many states also offer renewable energy credits on top of the federal credit.

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Installed or planning solar? Make sure you capture this significant credit on your next return.