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Is there a tax credit for solar water heaters? Follow

Yes, Solar Water Heaters can qualify for a tax credit.

How much:

30% of the cost (including installation costs), with no upper limit. (Credit decreases to 26% for tax year 2020; drops to 22% for tax year 2021)

Timing:

Tax credit in effect in through 2021. Must be installed in a home you own and use as a residence (no rentals, but second homes qualify) between January 1, 2006 and December 31, 2021.

Details:

  • Existing homes and new construction qualify
  • At least half of the energy generated by the solar water heater ("qualifying property") must come from the sun.
  • Homeowners may only claim spending on the solar water heating system property, not the entire water heating system of the household.
  • The system must be certified by the Solar Rating and Certification Corporation (SRCC).
  • The water must be used in the dwelling.
  • The credit is not available for expenses for swimming pools or hot tubs.

Find qualified models:

All ENERGY STAR certified solar water heaters qualify for the tax credit.  You will need to filter by 'solar' once you open the water heaters product list. 

How to apply:

File Tax Form 5695 with your tax return. 

 

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