Federal Tax Credits for Energy Conservation

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Federal tax credit for energy conservation can be availed if you purchase any energy efficient product or a renewable energy source system for your home. Though energy star qualifies many products as energy efficient, it should be noted that not all products qualified by energy star are eligible for federal tax credit. Products qualified by Energy Star can cost you little more than that of standard models, but will definitely save notable amounts in the long run as they expend less energy and makes you eligible for federal tax credit.

Following are the contrasted products that are capable for Federal Tax Credit for energy conservation and the extent of federal tax credit that can claimed for each product.

Biomass stoves, Heating, ventilating and air conditioning systems ( HVAC), insulation, energy efficient doors and windows, roofs both metal and asphalt , and any kind of insulation to the home. Tax credit can be availed up to 30% up to an amount of $1500.It must be your principal and current residence to claim tax credit. Rentals and New construction do not qualify for the tax credit.


Renewable energy sources like solar energy systems, geothermal heat pumps and solar heating systems are eligible for 30% tax credit on the cost of the product without any upper limit. New construction, existing, principal and second homes qualify for the tax credit. Only rentals do not qualify for tax credit.

Residential fuel cells are eligible for 30% of the cost, up to $500 per power ability of 5 kW. running homes and new construction qualify for the tax credit, rentals and second homes do not qualify for the same.

You can apply for tax credit for energy conservation for products in 2010 by filing IRS Form 5695 along with your taxes. You require to save receipts and certifications from manufacturer and submit the form along with your taxes to get Federal Tax Credit. The congress has extended the federal tax credits for energy conservation till 31st December 2010, so that you avail tax benefits in the coming year if you are planning to advance your energy capable products. So if you want to avail federal tax benefit for energy conservation it is significant for you to obtain the product placed or installed it before end of 2010.


Federal Tax Credits for Energy Conservation give out after 2010. The tax credit for products at 30% up to $1,500 can not be carried over to future years. A few selected products that are not subject to the $1500 limit can be carried forward.

The tax credit for the products like geothermal heat pumps, solar water heaters, small wind energy systems, solar panels etc at 30% with no upper limit can be carried forward for coming years.
So if you have purchased any energy efficient product in 2010 that is energy star qualified ,can get you tax credit in the current year of 2011 of 30% of total cost which has no upper limit, for rest of products tax credit expires.

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