The 2015 Energy Tax Credits (Available at this Time)
Before I cover the 2015 energy tax credits available to taxpayers, it’s worth pointing out that everything in this article could change by end of year, as last year’s energy tax credits were (and the prior year’s, with the fiscal cliff budget deal).
The tax credits for common residential home energy efficiency improvements (the simple and generous ones for windows, doors, roofing, furnaces, air conditioning, etc.) were retroactively restored at the last minute again in late December for the previous tax year, as part of the Tax Increase Prevention Act.
For late filers (and those hopeful for an extension), they included tax credits equal to 10% of cost up to $500, or a specific amount from $50–$300 for the following eligible items:
- Biomass Stoves
- HVAC Air Circulating Fan
- Central Air Conditioning
- Gas, propane, or hot water boiler
- Natural gas, propane, or oil furnace
- Gas, Oil, or Propane Hot Water Heater
- Electric Heat Pump Water Heater
- Windows, Doors & Skylights
Note that it can’t be any old product off that list – each must satisfy certain energy efficiency requirements to be eligible for the credit. More on those requirements can be found on the Energy Star Energy Tax Credit site.
Will the credits for these common residential energy efficiency improvements be extended into 2015? It’s hard to say, but if they are, I would not count on it until mid-to-late December. I wouldn’t plan a purchase around whether or not there is another retroactive extension. Rather, just buy the product, hope for the best, and reap the rewards of improved energy efficiency.
On to the bigger tax credits for more complicated installation projects. These will certainly be continuing throughout 2015.
30% Energy Tax Credits in 2015
The energy tax credits that certainly remain for 2015 (and 2016) are significant 30% tax credits on higher cost energy installation projects.
Three of these installation projects have no upper limit and include installation costs on primary and secondary homes (excludes rentals):
- geothermal heat pumps
- solar (includes photovoltaic and solar water heaters)
- small wind turbines (residential only and no more than 100 kW)
Another (fuel cells) has a cap of up to $500 per 0.5 kW of power capacity and only principal residences apply (installation costs are also included):
- fuel cells (efficiency of at least 30% and capacity of at least 0.5 kW)
All must meet strict Energy Star requirements in order to be eligible for the tax credit.
This is the second to last year that these big credits will be available for large products, unless extended. With the price of solar arrays having dropped so significantly, it could be worth crunching the numbers on the payback period.
2015 Energy Tax Credits Discussion:
- Have you or will you take advantage of a 30% energy installation project tax credit? Tell us about your project costs and tax credit savings.
- Are you hoping last year’s credit get extended into 2015?