Sunday, January 8, 2012

Residential Energy Efficient Property Credit

IRC Section 25D.  The Internal Revenue Service provides for a 30 percent credit for the installation of qualified solar water heating property, qualified solar electric property, geothermal heat pumps, and small wind energy property.  This credit will apply for property placed in service through December 31, 2016.

The expenditures that are eligible for this credit include the cost of installation.  However, costs that are allocable to a swimming pool or a hot tub are not eligible for the credit.  The installation does not have to be in the taxpayers principal residence, but it does have to be in a property located in the United States and used by the taxpayer as a residence (ie, could be a second home). 

This credit can be applied against any Alternative Minimum Tax through the 2011 tax year and any unused credit is carried forward.  There is no Adjusted Gross Income limitation for this credit.


  1. Great information! Thanks, Dan. I'll pass this along to my R.E. clients and friends who are considering their "green" options.

  2. Dan, if you get a rebate from your city, can you still take the 30% deduction off the gross (before the rebate)? My solar company is saying that you can