You have questions. We have answers (at least more than most contractors). Since 2007, we’ve helped homeowners get hundreds of thousands of dollars in home energy tax credits and cash incentives.
We’re home energy contractors, not tax professionals.
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Start by giving us a call at 541.330.8767, or schedule an appointment with one of our consultants. We’ll help you find the best opportunities to save money on your monthly energy bills and annual tax returns.
An energy tax credit is a government incentive that reimburses people and businesses when they invest in energy efficiency and renewable energy technologies. The credit counts as a dollar-for-dollar reduction in the amount of federal income tax owed to the IRS, or it gets added to a refund if one is due.
Tax Credits vs. Tax Deductions
Tax credits are different than tax deductions. Both lower the amount that you owe on your taxes, but in different ways. A tax deduction reduces your taxable income, potentially lowering the amount that you pay as a result. A tax credit is a dollar-for-dollar reduction in your tax bill and may even increase the size of your refund.
Tax Credits vs. Cash Incentives
You claim home energy tax credits when filing your federal income taxes for the previous year. In contrast, rebates or cash incentives reimburse you much more quickly - typically a few weeks after your project. At this time, there are no federal rebates for home energy upgrades, but we’re fortunate to have robust rebates at the state and utility level here in Oregon.
Most rebates or cash incentives are coordinated by the Energy Trust of Oregon, but there are a couple utilities that handle rebates for some customers in Central Oregon - Midstate and Central Electric in particular.
When you complete your taxes, be sure to file Form 5695 along with your federal tax return. Please consult with your tax professional for details.
Starting in 2023, tax credits cover up to 30% of the costs with a maximum of $1,200 annually for new insulation or energy efficient windows and doors. There’s an additional $2,000 tax credit available for heat pump technologies. The IRA also includes a $150 credit to cover the cost of a home energy audit performed by a qualified professional.
Here’s an Inflation Reduction Act tax credits list broken down by category:
$150: Home energy audits are eligible for a credit of $150.
$250: You can also receive a credit of $250 for exterior doors that meet ENERGY STAR requirements, with a maximum credit of $500 for all exterior doors.
$600: If you install qualifying exterior windows and skylights that meet ENERGY STAR's most efficient certification, you may qualify for a credit of $600.
$600: Additionally, you can receive a credit of $600 for other qualified energy property such as central air conditioners, electric panels and certain related equipment, natural gas, propane, or oil water heaters, oil furnaces, water boilers.
$2,000: Lastly, heat pumps and heat pump water heaters, as well as biomass stoves and boilers, may qualify for a credit of $2,000. This category is not subject to the annual $1,200 total credit limit or the $600 limit on other qualified energy property.
Please note that roofing improvements no longer qualify for a tax credit.
Unlike 2022 and previous years - when the $500 maximum tax credit applied to multiple years in a row - the new $3,200 tax credit from the IRA renews annually. So you can get back up to $3,200 in 2023, $3,200 in 2024, and so on.
We also expect to see increased rebates in Oregon from organizations like the Energy Trust of Oregon. The details are still getting worked out. Feel free to give us a call for the latest: 541.330.8767, or sign up for updates from cleanenergy.gov.
Before the IRA, homeowners could claim a total tax credit up to $500 for all years combined from 2006 to 2022. Tax credits through the IRA now renew annually, and the amount that you can claim has jumped dramatically.
Here’s how to get the most from the IRA tax credits.
Was $500, Now $3,200
You can now claim a tax credit of up to $1,200 for insulation, windows, and doors, plus an additional 30% up to $2,000 for heat pump technologies.
For details on how the tax credit breaks down, check out our answer above: Is there an Inflation Reduction Act tax credits list?
Was Lifetime, Now Annual
Now that IRA tax credits renew annually, you have a strong incentive to continue making your home more energy efficient over time.
The key to maximizing your tax credits is to space out your upgrades over a few years to take advantage of the annual aggregate limits.
Here’s a strategy to claim $7,500 in tax credits over three years:
Year One: $3,200
Prioritize attic insulation, and replace an older heating or cooling system with an energy efficient heat pump.
Combining these upgrades can qualify you for a $1,200 tax credit for insulation and a $2,000 credit for the heat pump.
Year Two: $3,200
Start replacing windows to max out the annual limit of $600.
Claim another $600 to upgrade your electrical panel, so it can handle your new heat pump, heat pump water heater, and perhaps an EV charger.
Finally, claim $2,000 to reimburse you for the cost of a heat pump water heater. A heat pump water heater operates so efficiently that an average family of four will save $470 each year on their energy bills or $4,570 over the life of the system.
Year Three: $1,100
Upgrade your exterior doors, and continue swapping out older windows with beautiful new ENERGY STAR-certified windows.
You can claim up to $500 for your doors and $600 for your windows.
To help come up with a plan that makes sense for your home and budget, please give us a call at 541.330.8767, or reach out to schedule an appointment.
Tax credits are available for certain improvements made to second homes used as a residence by the taxpayer. Landlords cannot claim these credits for rental properties. However, if you rent part of the home where you also live, then the tax credits may apply.
The rules vary depending on the credit.
The energy efficiency tax credits (covered by the Energy Efficient Home Improvement Credit) cannot be claimed for a newly constructed home. They only apply to qualifying upgrades for an existing home or for an addition or renovation to an existing home.
Tax credits for solar and battery storages (covered by the Residential Clean Energy Property Credit) can be claimed for either an existing home or a home that you’re building.
If a property is used solely for business purposes, it will not qualify for the tax credits. However, if you use the property for business purposes less than 20%, then you may claim the full credit.
If you would otherwise qualify for the home energy tax credits, but you use the property for business purposes more than 20%, then you have to calculate the credit based on the percentage of expenses that you can allocate to non-business use of the property.
The rules vary depending on the type of tax credit.
Energy efficiency tax credits (e.g. for adding insulation or a new heat pump) may not be carried forward. So if you don’t have enough tax liability to claim the full credit in the year that you do the upgrades, then you won’t be able to claim the tax credits.
However, tax credits that cover solar panels and related technologies in the Residential Clean Energy Property Credit may be carried forward to reduce tax liability in future tax years.
Starting n 2023, the tax credit for eligible home improvements cover up to 30% of the costs with a $1,200 annual limit (replacing the $500 lifetime limit). Here are the annual limits for specific improvements to heating, ventilation, and air conditioning (HVAC):
$600 for other “qualified energy property,” which includes updated electric panels and related equipment, central AC systems, gas furnaces, and gas water heaters
$2,000 for heat pumps and heat pump water heaters. Please note! Heat pumps and heat pump water heaters are not subject to the $1,200 annual limit on total credits or the $600 limit on qualified energy property.
Starting in 2023, you can claim a tax credit of up to $2,000 to cover the cost of installing an energy efficient heat pump, including support for any electric system upgrades needed to make your home ready for a heat pump.
The $1,200 annual limit on total credits and the $600 limit on qualified energy property do not apply to heat pumps and heat pump water heaters. So for example, if you maxed out your tax credit for insulation ($1,200) and a new heat pump ($2,000), you could claim a tax credit of $3,200 in the same year.
Our team will work to make sure that your heat pump meets the criteria needed to qualify for the heat pump tax credit. Please give us a call if you’d like to schedule a consultation: 541.330.8767.
If you’re considering another HVAC contractor, be sure to ask if the heat pump they recommend meets or exceeds the highest efficiency tier (excluding any advanced tier) set by the Consortium for Energy Efficiency (CEE) at the start of the year that you’re planning to install the system. You can also check the CEE Directory of Efficient Equipment for a list of qualifying heat pumps.
Definitely. Starting in 2023, you get a tax credit that covers up to 30% of the cost with annual maximum of $1,200 to install attic insulation, wall insulation, or floor insulation. If you start with a home energy audit, you can get a $150 tax credit.
If you work with GreenSavers to install insulation in Portland or Central Oregon, we’ll make sure that your project meets the criteria to qualify for the insulation tax credit.
Be careful working with a less reputable insulation contractor. To qualify for the insulation tax credit, the IRS requires that materials you use for insulation and air sealing meet the criteria of the International Energy Conservation Code (IECC) standard, which went into effect two years prior to the installation. For example, if you insulate your attic in 2025, the insulation materials must meet the IECC standard from January 1st, 2023.
The Residential Clean Energy Property Credit covers up to 30% of the cost to install solar panels and more for your home in Oregon. Here’s a breakdown of the categories that the tax credit covers:
Solar panels: What the IRS calls, “solar electric property expenditures”
Battery backup: Called “battery storage technology expenditures” by the IRS
Solar water heaters: Or “solar water heating property expenditures” according to the IRS
There are a few other categories - like wind turbines - but they’re not very common for homeowners in Oregon. Check out the FAQ from the IRS for details.
In general, no. The Residential Clean Energy Property Credit does not apply to traditional roofing materials and structural components because their main purpose is roofing or support.
However, some solar roofing tiles and shingles can generate solar electricity while also providing structural support. These measures are eligible for the credit.
Yes! Starting in 2023, if you install energy efficient windows and doors, you’ll get a tax credit to reimburse you up to $1,200 annually or 30% of the cost of the windows. To qualify, the windows must be ENERGY STAR certified.
Starting in 2023, you’ll be able to deduct up to $2,000 or 30% of the system costs - including labor - for a new heat pump water heater. Gas water heaters are eligible for a tax credit up to $600.
The Inflation Reduction Act creates a tax credit that covers 30% of the cost up to $600 for a new air conditioning system and up to $2,000 for a new heat pump.
In 2023, you’ll be able to claim a tax credit up to $600 for electrical panel upgrades. This tax credit does not count against the tax credit up to $2,000 for a new energy efficient heat pump or the solar tax credit that covers up to 30% of the cost for rooftop solar and battery storage.
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The best at what we do - From 2016 to 2023, the U.S. EPA and U.S DOE selected GreenSavers from more than 1,300 contractors across the country as ENERGY STAR Contractor of the Year. We earned that distinction because of our professionalism, customer service, and contributions to energy efficiency.
In it for the right reasons - Our mission is to improve lives, inspire our team, and serve our communities by building in a better, more holistic way. In January 2018, GreenSavers eared B Corp certification. Check out our Annual Benefit Report - We meet the highest standards of environmental performance, accountability, and transparency.
Clients love us - GreenSavers has the highest rating from Energy Trust of Oregon - 3 out of 3 stars - for customer service and quality performance. What's more, as an Energy Trust trade ally, we can help you access cash incentives to make it easier to improve your home’s energy efficiency.
