Federal Tax Credits from the Inflation Reduction Act

Energy Efficiency Home Improvement Credit

Homeowners can claim a tax credit of 30% of the cost of installing a heat pump or heat pump water heater up to $2000 annually. And, the same 30% tax credit is available for 95% efficient gas furnaces up to $600. Another credit up to $1,200 annually is available for energy efficient improvements to a home's envelope, including insulation and air sealing. A tax credit of up to $600 is also available for the installaiton of efficient windows and up $500 for efficient doors (capped at $250/door). Finally, a tax credit of up to $600 is available to upgrade an electrical panel and $150 for a home energy audit. These credits are limited to $2,000 annually for the heat pump or heat pump water heater, and $1,200 for any of the other improvements.

The Residential Clean Energy Credit

Homeowners can claim a tax credit for 30% of the installation cost of rooftop solar, batteries, geothermal or wind energy.

State Tax Credits and Rebates

Washington DC

The DC Sustainable Energy Utility is offering rebates of $375 for less efficient air source heat pumps and $700 for more efficient air source heat pumps. It is also offering between $300 and $600 in rebates for heat pump water heaters.

Virginia

Solar installations of up to 25 kilowatts are exempt from local and state property taxes.

Maryland

The Maryland Energy Administration is offering rebates of $1000 for solar panel or solar shingle installations, $500 for solar water heaters and $3000 for geothermal heat pumps and well fields.

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