Residential Energy Efficient Property Credit

Taxpayers can claim a tax credit for residential energy efficient property placed in service in 2006–2016. (IRC §25D)

Residential Energy Efficient Property Credit—2010

Property Type                                                 Credit Amount
Solar Water Heating                           30% of cost (before 2009, credit capped at $2,000)
Solar Electric                                     30% of cost (before 2009, credit capped at $2,000)
Fuel Cells                                          30% of cost; max credit = $1,000 per kW of capacity
Small Wind Energy                             30% of cost (before 2009, credit capped at $4,000)
Geothermal Heat Pump                      30% of cost (before 2009, credit capped at $2,000)

• The credit (other than for fuel cells) is restricted to equipment for the taxpayer’s personal residence, which must be in the U.S. The credit for fuel cell property is only available for a principal residence.
• No credit is allowed for equipment used to heat swimming pools or hot tubs.
• The cost includes labor costs properly allocable to the onsite preparation, assembly or original installation of the property and for piping or wiring to interconnect such property to the home.
• The taxpayer’s basis in the credit property is reduced by the amount of the credit.
• Taxpayers can rely on manufacturer’s statement that property qualifies for the credit. (Notice 2009-41)

Personal Energy Property Credit—Qualifying Property (2009–10)
Credit summary:

(1) credit equals 30% of cost of qualified property,

(2) $1,500 credit limit (2009 and 2010 combined) and

(3) taxpayer’s principal residence only.