Federal Tax Credits for Energy Efficiency: A Win for Your Wallet and the Planet
The Inflation Reduction Act of 2022 opens the door to significant savings while promoting sustainable energy practices. Through enhanced federal tax credits and deductions, homeowners and commercial property managers can upgrade to energy-efficient systems and reduce costs.
For Homeowners: Maximize Savings While Going Green
Homeowners can save up to $3,200 annually in federal tax credits for energy-efficient upgrades through 2032. Highlights include:
- Home Improvement Tax Credits: Covering 30% of costs, up to $1,200 annually, for upgrades such as insulation, windows, and doors.
- Heat Pump Tax Credits: Up to $2,000 for air-source heat pumps or other energy-efficient heating and cooling technology.
- Residential Clean Energy Credit: A 30% credit for installing clean energy systems like solar panels, geothermal pumps, and battery storage, with stepped-down rates in 2033 and 2034.
Plan Your Upgrades: To maximize savings, combine upgrades strategically—like pairing insulation with heat pumps—to reach the $3,200 annual credit limit. Learn More: Visit energystar.gov/taxcredits to explore eligible products and installation options in your area.
For Commercial Properties: Energy Savings at Scale
Commercial property managers can leverage tax deductions to offset the cost of installing energy-efficient equipment under Section 179D of the tax code.
Eligible Upgrades:
- Interior Lighting
- HVAC Systems
- Hot Water Systems
- Building Envelope Enhancements
Deduction Pathways:
- Energy Efficiency Retrofit Property (EEBRP): Deductions based on a percentage of energy savings, up to $1.00 per square foot for buildings with 50% savings.
- Energy Efficient Building Property (EECBP): Traditional deductions up to $1.80 per square foot for buildings achieving significant energy savings.
The DOE’s 179D Portal offers tools to estimate potential savings and assess project eligibility using energy modeling or measured performance data.
Discover Tools: Visit the DOE 179D Portal for guidance.
Why It Matters
Energy-efficient upgrades not only lower utility costs but also reduce energy demand, paving the way for a cleaner and more sustainable future. Whether you’re a homeowner or a property manager, these federal incentives make going green an achievable and financially sound choice.
Ready to start saving? Explore your options, claim your credits, and make a positive impact today.
For additional resources:
- IRS Guidance: Tax Credits for Commercial Buildings
- ENERGY STAR for Businesses: energystar.gov/buildings
