What Are Energy Tax Credits?
This credit allows you a 30 percent reduction in tax liability for whatever you spent buying and installing environmentally-friendly equipment in your home. To qualify, you have to install the new equipment before the end of 2017.
Qualifying equipment includes solar-powered units that generate electricity and hot water in the home, energy-producing wind fans and geothermal heat pumps. The credit is only available for improvements you make to your primary home. If you are adding solar panels to your summer house, you won’t get a tax break for it.
To minimize the environmental pollution that gasoline-powered vehicles create and to encourage people to by electric vehicles, the federal government offers a tax incentive. The value of the tax credit ranges from $2,500 to $7,500 depending on the battery capacity of the plug-in electric vehicle.
To qualify for the credit, the vehicle has to have at least four wheels, weigh less than 14,000 pounds and draw propulsion using a battery with capacity of at least five kilowatt hours. The vehicle also has to be rechargeable using an external electricity source.
The full amount of the credit will be reduced after the manufacturer has sold at least 200,000 vehicles.