Residential Energy Efficient Property Credit
The Residential Energy Efficient Property Credit is a federal tax credit designed to encourage homeowners to invest in renewable energy systems and energy-efficient improvements to their residences.
This credit allows taxpayers to claim a percentage of the cost of qualifying solar energy systems, wind turbines, fuel cells, and geothermal heat pumps installed in their homes. For example, if a homeowner installs solar panels costing $20,000, they may be eligible for a credit of 26% (as applicable for tax years 2020-2022), resulting in a $5,200 reduction in their tax liability. This credit is non-refundable, meaning it can reduce the tax owed to zero but will not result in a refund if the credit exceeds the tax liability.
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