top of page

IRS Tax Credits For Solar Panels & Home Improvements

If you're in the market for solar or home improvements, this one's for you..........

Congress passed the "Inflation Reduction Act" a few weeks back. Lots of goodies and included were more generous incentives for home improvements. Here's a quick summary.


The break for adding solar panels to your home is extended through 2034. Individuals get a tax credit for installations whether they are installed in a primary residence or vacation home. Starting in 2023, the credit is expanded to cover battery storage technology that is installed in your residence. The credit equals 30% of the cost of the equipment and installation for 2022 through 2032.

INSULATION/WINDOWS/DOOR..........The credit for adding energy-efficient improvements to your main home is back. For 2022, the credit applies to 10% of the cost of certain types of insulation, plus external windows, doors and skylights. The credit also includes 100% of the cost of electric heat pumps and water heaters, some central air-conditioning systems and similar energy-saving investments. There is a lifetime credit limitation of $500. And the credit is capped for many items: No more than $150 for hot water boilers and furnaces, $200 for a window and $50 for a furnace circulating fan, for example. This credit originally expired at the end of last year, but Congress has now revived it.

But starting in 2023, the credit is larger: First, the credit percentage increases to 30% of costs. Second, the $500 lifetime limit is replaced with a $1,200 annual limit. This annual limit is lowered to $600 in the aggregate for exterior windows and skylights and $500 for exterior doors, and for other items. The annual limit increases to $2,000 for a biomass stove or hot water boiler, or an electric or natural gas heat pump put in the home. And third, you can take a credit for up to $150 of the cost of a home energy audit.

So keep your receipts and I'll sort it out with you at tax time.

If you have questions, please let me know.

18 views0 comments
bottom of page