How to Qualify for Energy Efficiency Tax Credits in 2020 | Inspire Clean Energy (2023)

Upgrading your home energy solutions could help you to slowly reduce your monthly energy bills over time as well as improving energy-efficiency, which is a great way to be kind to the environment and help in the fight against climate change.

However, making energy-efficient home improvements is a very expensive venture, which is why many people feel that they can’t do anything to change their home for the better. Whatever type of efficient energy you are looking to improve your home with, there are energy tax credits available to you that can make these environmentally friendly upgrades much more affordable.

Also, don’t worry if you find that most of these home improvements are out of your price range at this moment. We can help you switch to clean energy in just 5 minutes.

Energy-Efficient Home Improvements

So, what steps can you take to make your home environmentally-friendly and energy-efficient?

Switch to a Renewable Energy Provider

The first step towards an energy-efficient home is to switch to a renewable energy company like us. Instead of using those harmful fossil fuels to provide energy to your home, we provide you with clean energy from renewable sources.

When you take this first step, everything else you do will have serious benefits on the environment and the price of your energy bills. Make the switch to clean energy today to start helping heal the environment one step at a time.

Although switching to Inspire by itself does not get you a tax credit, you can pair your new unlimited clean energy plan with any of the upgrades below that do qualify:

Biomass StovesBiomass stoves create heat from the combustion of organic materials, typically compressed wood or biomass pellets. This organic material burns cleanly for an affordable, efficient, and environmentally friendly source of heat. Of course, you should be aware that you are still burning materials, and so there will be some waste being produced.

When you switch to a biomass stove, you can get a maximum energy efficiency credit of $300.

Advanced Main Air Circulating FansAdvanced main air circulating fans are an efficient way of producing heat for your home through a fan or blower motor blowing air into your furnace to be heated up and fed into your duct system. Again, the fuel used for your furnace and how energy efficient it is will make a big difference in how clean and energy-efficient this form of heating is for you.

Advanced main air circulating fans qualify for a maximum credit of $50 – so there are generally better options.

(Video) Tax Credits on Energy Efficiency

Air Source Heat PumpsAir source heat pumps are systems that use electricity to take heat from outside and bring it into your home for warmth and hot water. This is a great choice because it uses electricity, so is energy-efficient and clean.

Since this is such a great source of heat, air-source heat pumps have a maximum credit of $300.

Central Air ConditioningMost of us have some form of air conditioning in our homes, but many aren’t working optimally. To keep your air conditioning working cleanly, use energy from clean sources, change air conditioning filters clean, get the whole system cleaned regularly, and only run it when necessary.

If your system is old, upgrading will help you not only get a better quality of air but cut down your energy consumption, too. When you upgrade, you can qualify for a maximum credit of $300.

Gas BoilersGas boilers work to heat water to provide your home with hot water and heating, using natural gas and aren’t an eco-friendly choice because they rely on natural gas, which must be extracted from beneath the earth’s crust.

However, you can receive a maximum energy credit of $150.

Gas FurnacesGas furnaces also use natural gas, but they work to heat your home by heating air and distributing that hot air through your ducts. As previously noted, this isn’t an environmentally friendly option, so we wouldn’t recommend it. However, you can qualify for an energy credit of up to $150.

Gas Heat Pump Water HeatersRather than directly generating heat, a gas heat pump water heater moves heat from one place to another. This heating system is typically 2 or 3 times more energy-efficient than traditional water heaters.

Again, this isn’t the best choice because it relies on gas. You can find electric heat pump water heaters, however, which would be the best choice. Any of these energy-efficient heat pump water heaters qualify for a maximum energy credit of $300.

Electric Heat Pump Water HeatersAs we talked about above, these work in the same way as gas heat pump water heaters, except electricity is used to power the pump. This is by far the best way to heat your water, and you can get a maximum energy credit of $300.

Propane BoilersExactly the same as a gas boiler, but propane is used instead of natural gas. Propane is more expensive, but it is generally available wherever you live. Again, this is still using fossil fuel, so isn’t good for the environment.

(Video) Energy Efficiency Tax Credits

However, for a new energy-efficient propane boiler, you can get a maximum energy credit of $150.

Propane FurnacesThe same as a gas furnace, but propane is used instead of natural gas. Propane is expensive but readily available. Again, this is a fossil fuel so not eco-friendly, but you can get a maximum energy credit of $150 for a new energy-efficient furnace.

Propane Heat Pump Water HeatersThese work in the same way as gas or electric heat pump water heaters except propane is used to power the pump – as we’ve talked about above, an electric pump is the best choice for the environment.

Still, upgrading to an energy-efficient water pump has a maximum credit of $150.

Energy-Efficient DoorsExterior doors of a home are responsible for a significant amount of air leakage, so it is important to replace your exterior doors with new models for better energy efficiency. These new doors will have weather-stripping that seals potential air leaks. Old glass or patio doors are particularly inefficient, so it is beneficial to invest in new ones if you can.

You can receive a maximum energy credit of $500 toward your new doors (installation not included).

Energy-Efficient SkylightsAs you’ll know if you have one, old skylights are terrible for being a source of heat in the summer and freezing temperatures in the winter. New skylights are made with more energy-efficient technologies, such as heat-absorbing tints and insulated glazing, to reduce these temperature changes.

If you’re ready to upgrade, you can receive an energy credit of up to $500 (installation not included).

Energy-Efficient WindowsInefficient windows contribute to more energy being needed for heating or cooling the home, due to draughts or air escaping. Replacing your old windows or updating your existing windows with weather-stripping and treatments can significantly increase the energy efficiency of your home and severely reduce energy bills.

You can get a maximum energy credit of $200 for new energy-efficient windows (installation costs not included).

InsulationHaving good insulation is key to ensuring you keep your heat inside in the winter and cold air in the summer. When your insulation isn’t working effectively, your heating and cooling systems have to work twice as hard, driving up your energy consumption.

(Video) Energy Efficient Home Improvement Tax Credits

You can get an energy credit of up to $500 to help with the costs of replacing your old and inefficient insulation.

Metal or Asphalt RoofsInstalling a metal roof can help to significantly lower your energy bills in the summer months as its reflective surface causes heat to “bounce back” rather than being absorbed into your home, which often happens with more traditional roofing materials. This results in your cooling system needing to work harder and use more power.

You can get a maximum energy credit of $500 or metal or asphalt roofing.

Residential Energy-Efficient Property Credit

To qualify for a home improvement tax credit, there are several energy-efficient systems that you can add to your residential property:

Switch and Earn $25 for Every FriendWhen you switch to Inspire, not only will you be helping to increase the effort towards abolishing the use of fossil fuels in the fight against climate change, every time you refer a friend to Inspire, you and your friend will receive a credit of $25!

Solar Water HeatersSolar water heaters are a particularly cost-effective method of heating your water, and best of all, they use a free source of energy… sunlight! The solar water heater works to preheat water before it is fed into your conventional water heater so that less energy is needed to heat it up to the desired temperature.

The solar water heating tax credit allows you to get 26% of the full cost (system and installation) in 2020, although this rate is being reduced to 22% in 2021.

To qualify for solar water heating tax credit:

  • The heater must be installed in the home in which you reside
  • At least half of the generated energy needs to come from the sun
  • You can only claim for the solar water heating system itself, not your entire system
  • Cannot be claimed for expenses relating to swimming pools or hot tubs, only the water used in the dwelling

PV Solar PanelsPhotovoltaic solar panels are a very popular method of utilizing renewable energy, often placed on rooftops of residential homes. Using sunlight to produce electricity is a super clean form of energy and helps to reduce negative impacts on the environment.

The solar tax credit allows you to get 26% of the full cost (system and installation) in 2020, although this rate is being reduced to 22% in 2021.

To qualify for the solar tax credit you must meet the same criteria as above.

(Video) What is the Energy Tax Credit for 2020, 2021? How to Claim & Qualify

Solar Tax CreditThe solar tax credit allows you to get 26% of the full cost (system and installation) in 2020, although this rate is being reduced to 22% in 2021.The same qualifications above apply.

Wind EnergyWind energy is another renewable energy system that can provide you with clean energy at home, saving you anything from 50-90% of your usual energy bill. Wind causes the turbines to spin, and they convert the kinetic energy into electricity.

The wind energy tax credit allows you to get 26% of the full cost (system and installation) in 2020, although this rate is being reduced to 22% in 2021.

To qualify for wind energy tax credit:

  • No more than 100 kilowatts of electricity must be generated
  • The system does not have to serve the taxpayer’s residence – can be a second home, but you will need to install the wind turbine to claim the credit
  • Pair a new wind turbine with unlimited clean energy from Inspire to switch completely to renewable energy:

What qualifies as a home improvement for a tax credit?

Solar electricity systems, solar water heaters, small wind turbines, and geothermal heat pumps all qualify as a home improvement for a tax credit.

How does the federal solar tax credit work?

The federal solar tax credit applies to solar electric systems and solar water heaters. It is currently set at 26% of the total cost of installation, but in 2021 this rate is being reduced to 22%. From 2022 this tax credit will no longer be available for homeowners, but commercial system owners will still be able to claim 10%.

Are there incentives for making your home energy efficient by installing alternative energy equipment?

Several states give tax incentives to improve energy efficiency using alternative energies. Some local utilities also give out incentives in the form of rebates for energy-efficient appliances, equipment, and building materials.

Is a roof eligible for the residential energy efficient property tax credit?

Generally, roofs made from traditional materials are not eligible for a tax credit, including the roof itself and the rafters. However, if you use roofing materials that serve as collectors for solar energy as well as for structure, you may qualify for a tax credit.

What improvements qualify for the residential energy property credit for homeowners?

Energy-efficient improvements that qualify for a credit include:

  • windows, skylights, and exterior doors
  • metal and asphalt roofs
  • insulation
  • heating and cooling systems
  • water heaters
  • biomass stoves

Who qualifies to claim a residential energy property credit?

You may qualify for a residential energy property credit if you make energy-efficient home improvements within a taxable year. This credit is non-refundable, which means that taxpayers can lower their tax liability to zero but no lower.

With energy-efficient tax credits, making environmentally friendly changes to your home is now more affordable than ever, and you can rest well in the knowledge that you are helping in the fight to have a more sustainable planet.

(Video) How to save money with new clean energy tax credits

Of course, if it’s still out of reach to purchase new appliances or energy-proof your home, the best way to make a positive change is by becoming an Inspire member. Our members choose completely clean, renewable energy, which is the best way to stop contributing to climate change today.

Click here to make the switch to clean energy.


How does a tax credit work? ›

Tax credits directly lower the amount of tax you owe, while tax deductions lower your taxable income. For example, a tax credit of $1,000 lowers your tax bill by that same $1,000. On the other hand, a $1,000 tax deduction lowers your taxable income (the amount of income on which you owe taxes) by $1,000.

What is the most efficient renewable energy source? ›

We can find out which one of these renewable alternatives and power technology examples are the most efficient by calculating the costs of the fuel, the production, and the environmental damages. Wind comes out on top by a wide margin over all the other sources.

Are we getting a stimulus check in July 2022? ›

State leaders say an estimated 23 million people qualify for the checks, which will be sent out between October 2022 and January 2023. The payment is only available to residents who have lived in California for at least 6 months in the 2020 tax year or who are living in the state by the time the check is issued.

How many hours do u need to work to claim tax credits? ›

What you can claim
Your circumstancesMinimum working hours a week
Single with one or more children16
Couple with one or more children24 hours combined, and one must work at least 16 hours
Age 25-5930
Age 60+16
1 more row
19 Feb 2017

What is the most efficient energy source 2022? ›

  • Solar Power.
  • Wind Energy.
4 Jul 2022

What is the most efficient energy source besides nuclear? ›

Solar power is abundant, inexhaustible, and arguably the best known of the alternative energy sources. The most common method of harnessing this energy is through the use of solar panels that convert sunlight to electricity that is then distributed to the end-user.

What is the least efficient energy source? ›

Non-renewable energy sources result in the waste of coal or natural gas. This requires additional energy and environmental mitigation. For this reason, the efficiency of usable energy for the least efficient source of energy — coal — comes in at a meager 29% of its original energy value.

Will seniors get a 4th stimulus check? ›


Why did I get two Social Security checks this month? ›

The most common reason someone might be receiving two Social Security payments in a single month is that they are receiving both Social Security Disability Insurance (SSD or SSDI) benefits and Supplement Security Income (SSI) benefits.

How much is the stimulus check October 2022? ›

$350: Individuals who earn less than $75,000 per year. $700: Couples who file jointly and earn less than $150,000 per year. $350: Additional payout for the above families who have at least one dependent.

Do you get more tax credits if you work 30 hours? ›

If you work 30 hours a week or more a bonus is payable in Working Tax Credit. In couples it is your combined work hours that are counted when working out your entitlement to this bonus.

Can I get tax credits if I work 40 hours? ›

You can only claim tax credits if you work at least 16 hours a week and are either: responsible for a child under 16. eligible for the 'disability element'

Does working more hours affect tax credits? ›

Your normal hours will change for working tax credit. Depending on how your hours change you may get less working tax credit or you may no longer qualify for working tax credit. If you no longer qualify, you may get a four week run-on of working tax credit.

What is the most efficient source of electrical power? ›

Nuclear Has The Highest Capacity Factor

This basically means nuclear power plants are producing maximum power more than 92% of the time during the year. That's about nearly 2 times more as natural gas and coal units, and almost 3 times or more reliable than wind and solar plants.

What is the disadvantage of renewable energy? ›

One disadvantage with renewable energy is that it is difficult to generate the quantities of electricity that are as large as those produced by traditional fossil fuel generators. This may mean that we need to reduce the amount of energy we use or simply build more energy facilities.

Is renewable energy cheaper 2022? ›

Renewables are by far the cheapest form of power today,” said Irena director-general Francesco La Camera. “2022 is a stark example of just how economically viable new renewable power generation has become.

How can I generate electricity at home for free? ›

Generating Electricity at Home
  1. Residential Solar Panels. Every ray of sunshine that lands on your roof is free electricity for the taking. ...
  2. Wind Turbines. ...
  3. Solar and Wind Hybrid Systems. ...
  4. Microhydropower Systems. ...
  5. Solar Water Heaters. ...
  6. Geothermal Heat Pumps.
26 Sept 2018

What is considered clean energy? ›

“Clean” energy is energy that emits little to no greenhouse gas emissions and includes renewable and carbon-free sources. This is in contrast to fossil fuels, which produce a significant amount of greenhouse gas emissions, including carbon dioxide and methane.

Which is the best and cleanest way to produce electricity? ›

In fact, wind energy, harnessing power from the wind, is one of the cleanest and most sustainable ways to generate electricity as it produces no toxic pollution or global warming emissions.

What are the safest and cleanest sources of energy? ›

But as we looked at previously, nuclear is one of the safest and cleanest energy sources – per unit of energy it results in hundreds of fewer deaths than coal, oil or gas, and is comparable to modern renewables such as solar or wind.

Are solar panels cheaper than electricity? ›

Clearly, solar power is more cost-effective than “regular” or standard electricity. According to the World Economic Forum (WEF), installing new solar panels is cheaper than a comparable investment in coal, natural gas or other fossil fuel options.

Do tax credits give you money? ›

Tax credits directly reduce the amount of tax you owe, giving you a dollar-for-dollar reduction of your tax liability. A tax credit valued at $1,000, for instance, lowers your tax bill by the corresponding $1,000. Tax deductions, on the other hand, reduce how much of your income is subject to taxes.

How does a tax credit work if I don't owe taxes? ›

Even with no taxes owed, taxpayers can still apply any refundable credits they qualify for and receive the amount of the credit or credits as a refund. For example, if you end up with no taxes due and you qualify for a $2,000 refundable tax credit, you will receive the entire $2,000 as a refund.

How do I know if I get tax credits? ›

To get Working Tax Credits you must be on a low income and work at least 16 hours a week. What counts as a low income, and how many hours you need to work depends on your circumstances.

What is tax credit in simple words? ›

A tax credit is a dollar-for-dollar reduction of the income tax you owe. For example, if you owe $1,000 in federal taxes but are eligible for a $1,000 tax credit, your net liability drops to zero.

What can I claim on tax without receipts 2021? ›

Non-receiptable deductions include home office use, work-related automobile expenses, and uniform costs. Instead, a log of internet/mobile/home office time is required.

How do you qualify for the American Opportunity credit? ›

To be eligible for AOTC, the student must: Be pursuing a degree or other recognized education credential. Be enrolled at least half time for at least one academic period* beginning in the tax year. Not have finished the first four years of higher education at the beginning of the tax year.

What tax deductions can I claim 2020? ›

What tax deductions and credits can I claim? Here are 9 overlooked ones that can save you money
  • Earned Income Tax Credit. ...
  • Child and Dependent Care Tax Credit. ...
  • Student loan interest. ...
  • Reinvested dividends. ...
  • State sales tax. ...
  • Mortgage points. ...
  • Charitable contributions. ...
  • Moving expenses.
6 Mar 2020

What deductions can I claim without receipts 2020? ›

Here's what you can still deduct:
  • Gambling losses up to your winnings.
  • Interest on the money you borrow to buy an investment.
  • Casualty and theft losses on income-producing property.
  • Federal estate tax on income from certain inherited items, such as IRAs and retirement benefits.

Do I have to pay back the premium tax credit? ›

If at the end of the year you've taken more premium tax credit in advance than you're due based on your final income, you'll have to pay back the excess when you file your federal tax return. If you've taken less than you qualify for, you'll get the difference back.

Can I get a tax refund even if I didn't work? ›

If you qualify for tax credits, such as the Earned Income Tax Credit or Additional Child Tax Credit, you can receive a refund even if your tax is $0. To claim the credits, you have to file your 1040 and other tax forms.

Who is entitled to tax credits? ›

You can claim if you work less than 24 hours a week between you and one of the following applies: you work at least 16 hours a week and you're disabled or aged 60 or above.

Are tax credits based on last years income? ›

Initial and final award

Your initial tax credit award is based on your income in the last tax year 2021/22 (6 April 2021 to 5 April 2022). Your final tax credit award can be calculated using either your 2021/22 income or your 2022/23 income.

How much savings can I have on tax credits? ›

Unlike most other means-tested benefits there is no limit on how much capital or savings you can have.

What are the 2021 tax credits? ›

For tax year 2021, the Child Tax Credit increased from $2,000 per qualifying child to: $3,600 for children ages 5 and under at the end of 2021; and. $3,000 for children ages 6 through 17 at the end of 2021.

Which of the following is not included in earned income? ›

Earned income does not include amounts such as pensions and annuities, welfare benefits, unemployment compensation, worker's compensation benefits, or social security benefits.

What is the maximum time limit for input tax credit? ›

Time limit to claim an input tax credit under GST

2022-23) is 20th October 2022**. The date of filing GST annual return for FY 2021-22 is 31st December 2022.


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2. Form 5695 For 2020, 2021 Energy Tax Credits
3. 179D Tax Deduction | Qualify for up to $1.80/sqft on Energy Efficiency Projects
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5. Dear Claire, Do I qualify for energy-efficiency tax credits? | Paris Group Realty, LLC
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6. Claim a Tax Credit for Solar Improvements to Your House - IRS Form 5695
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