Tax credits for home energy efficiency upgrades and renewable energy systems can make energy improvements more affordable than ever. In addition, Loup Power District has several EnergyWise incentives that you may also be eligible for. Paired together, you can add value, comfort, and efficiency to your home.
If you made any of the eligible improvements to your home in 2023, make sure you claim them on your 2023 taxes. If doing your 2023 taxes has prompted your tax planning for next year, now is the time to review the list of eligible improvements and start planning your strategy.
Maximize Your Tax Credits
Unless you have specific equipment (e.g., heating or cooling) that needs to be replaced immediately, you may want to create a multiyear strategy that:
- Maximizes total allowable tax credits, which are capped at $3,200 each year.
- Incorporates credits available through 2032.
- Allows for continuous improvement to your home’s comfort and efficiency.
- May be helpful to spread out large investments, such as windows. Be sure to discuss installation costs with your window installer when you consider whether to purchase windows and doors over multiple years.
As an example of a multiyear strategy, you could:
- In 2024, start with a hom energy audit 🏠 using our Home Energy Assessment Tool and checking out our Energy Resource Center.
- Then, based on the recommendations from the audit, address your home’s envelope, which is often the first step when making home efficiency improvements. To ensure that your home is as energy-efficient as possible before you invest in new heating or cooling equipment, try replacing your home’s:
- Insulation (🔥 tax credit of 30% of the cost) + EnergyWise incentive of 30¢ per square foot up to $600.
- Inefficient exterior doors (🚪 30% of cost, up to $500, or $250 each)
- Drafty windows (🏚️ 30% of cost, up to $600).
- These incentives are capped at $1,200 per year.
- If you do need to consider replacing your heating, cooling, or water heating system to reach your yearly tax credit maximum of $3,200, you could install:
- A heat pump or heat pump water heater (🚿 30% of the cost, up to $2,000) + EnergyWise incentive
- Efficient air conditioner or heating equipment (🌡️ 30% of the cost, up to $600)
- Efficient water heating equipment (♨️ 30% of the cost, up to $600) + EnergyWise incentive
- In 2025, you could continue making home envelope improvements to again reach your cap of the $1,200 home envelope tax credit, again evaluating your home heating, cooling, and water heating needs, and purchasing equipment to maximize your tax credits for the year.
- In subsequent years, continue making more home energy upgrades, which could include an upgrade to renewable energy, installing:
- A geothermal heat pump (🌋 30% of the cost)+ EnergyWise incentive
- A geothermal heat pump (🌋 30% of the cost)+ EnergyWise incentive
- If you have or are planning to purchase an electric vehicle:
- First, explore tax credits available for vehicles (🚗 up to $4,000 for used or $7,500 for new)
- You may want to install a home electric vehicle charger at your home (🔌 30% of the cost, up to $1,000) + EnergyWise incentives for charging stations and pre-wiring
See What Tax Credits You Qualify For
As always, talk to your tax professional and review the IRS website to ensure you have the latest official guidance on tax credits, and review the tax credit requirements for each product carefully before making any purchase.
Learn more about all our EnergyWise incentives.
Full list of energy tax credits for your home.