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What Tax Breaks Are There For Using Energy Saving Products?

Posted on 03, Jun, 2013

Even the Federal Government has finally acknowledged that we can't simply keep burning through our existing fuel supplies in the dual hope that they're both harmless to the environment, and are also in infinite supply.

Basically you lose a vast amount of heat through old windows and doors in your home and older and inefficient HVAC systems need to be upgraded to systems that offer far higher levels of energy efficiency. One very clear sign that the Government is paying attention to all of the above is that there are Federal stimulus packages available in the form of tax credits for anyone who wishes to upgrade their home to become more energy efficient.

So what tax breaks are you entitled to if you do actually become more energy efficient, and are there any additional perks for home owners wanting to install solar panels, geo-thermal heating and/or wind-generated power systems?

Windows, Doors, Skylights and Roofs

You're entitled to a 10% tax credit on the cost of these items, with a maximum limit of $500. Please note that windows have a cap of $200 instead.

Biomass Stoves

If you fit an approved stove with a biomass rating of 75% you can get a maximum tax credit of $300. The type of fuel used in these stoves can include agricultural products, trees, waste wood and wood pellets, grasses and other fibers.

HVAC Systems

Explaining these credits in detail goes beyond the scope of this article, but you can expect to receive a 10% tax credit on heat pumps, boilers, furnaces, etc… up to a maximum value of $300. Most modern furnaces and boilers are at least 50% more energy efficient than models produced even just 20 years ago.


If you insulate your walls and ceilings you should be entitled to a tax break of 10%, with a maximum payout of $500. If your home isn't insulated properly you're literally burning money every time you turn the heating on.


Replacing your existing roofing for a more energy efficient type can net you a tax credit of 10%, with a total payout of $500.  All of the above tax credits are only available until December 31st, 2013.

Fuel Cells

If you've decided to use fuel cells as part of your environmental push, and to reduce your carbon footprint, you'll be entitled to a tax break of 30% of the cost, with an upper limit of $500 per .5kW of power.

GeoThermal, Solar and Wind Turbines

If you choose to install any of these alternative energy sources to supplement your existing energy demands you can get a 30% tax credit with absolutely no upper limit on how much you can claim. Plus you can also claim these tax credits at any time between now and 2016 - giving you plenty of time to get the work completed.

It's also worth mentioning that some states also offer individual energy efficiency income tax credits too - which can be combined with the federal tax credit if you wish. To benefit from these tax credits you also need to be using approved Energy Star products - not everything with the Energy Star logo is approved. These tax credits also only apply to property owners - rental properties do not qualify.

Tags: #tax breaks

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