How It Works
The Residential Clean Energy Credit helps you save money when you add clean energy to your home. It covers 30% of the cost for things like solar panels, wind turbines, and battery storage. This credit is good for things installed from 2022 to 2032. In 2033, the credit lowers to 26%, and in 2034, it lowers to 22%.
This credit won't give you extra money back if it’s more than the tax you owe. But, if you don’t use all of it, you can save the rest to lower your taxes in future years.
There is no limit on how much you can claim each year, except for fuel cells. You can use this credit every year as long as you add new clean energy to your home before 2033.
Fuel Cell Limits
Fuel cells have a limit of $500 for each half kilowatt of power. If more than one person shares the home, the total credit can’t be more than $1,667 per half kilowatt.
Who Can Get This Credit?
You can get this credit if:
✅ You own or rent your main home in the U.S. (where you live most of the time).
✅ You add new clean energy to your home.
❌ You can’t get this credit if you are a landlord or don’t live in the home.
❌ You can’t use this credit for fuel cells in a vacation home.
What If You Use Your Home for Business?
If your home is only for business, you can’t get this credit. If you use part of your home for business:
Less than 20% business use → Full credit
More than 20% business use → Partial credit
What Counts for the Credit?
You can use this credit for:
✅ Solar panels (for electricity)
✅ Solar water heaters
✅ Wind turbines
✅ Geothermal heat pumps
✅ Fuel cells
✅ Battery storage (starting in 2023)
The credit covers labor costs for installing these systems. But regular roofing materials don’t count, unless they also create clean energy (like solar roofing tiles).
Do Rebates or Incentives Affect the Credit?
Sometimes, yes! If you get a rebate or subsidy, you might have to subtract that from the cost before claiming the credit. However, net metering credits (when you sell extra energy back to the power company) don’t affect your credit.
How to Get the Credit
To claim the credit, you need to:
Fill out IRS Form 5695 with your tax return.
Claim it in the year the system is installed (not when you buy it).
For more help, follow the step-by-step guide from the IRS.
Visit the IRS website for more info at
(we are not tax experts and cannot offer legal tax advice, please talk to your local tax accountant for advice)
Comments