Your Guide to Solar & Energy Efficiency Tax Credits in 2023

Dec. 28, 2022

If you’ve been thinking about installing solar panels or making energy efficiency upgrades to your home, 2023 is the year to do it. The Inflation Reduction Act of 2022 (IRA) introduced some impressive tax credits that make it much easier to invest in upgrades like solar panel installation, solar batteries, heat pumps, and more. 

The benefits these tax credits offer are enormous, and you don’t want to miss out on savings. To help, we’re breaking down the best tax credits for solar and energy efficiency improvements in 2023. 

*DISCLAIMER: While this blog post discusses solar tax credits, you should ALWAYS consult your tax professional for your specific situation. We do not assume responsibility for your tax situation or credits.

What Is a Tax Credit? 

A tax credit is an amount of money taxpayers can subtract from the income taxes they owe in a given year. For example, if you owe $1,000 in federal income tax when you file your return and you have a $600 tax credit, your tax liability would drop to $400. 

The Inflation Reduction Act Tax Credits for 2023 

The Inflation Reduction Act made two separate tax credits available to taxpayers in 2023: the Investment Tax Credit and the ​​Energy Efficient Home Improvement Tax Credit. 

The Investment Tax Credit for Solar Panels & Batteries 

The solar Investment Tax Credit goes by many names, including the federal solar tax credit and the Inflation Reduction Act solar tax credit. This tax credit has been around for years, but was recently increased and extended by the Inflation Reduction Act. It offers homeowners and businesses a tax credit worth 30% of their total solar panel installation costs. 

Here’s what you need to know about the federal solar tax credit in 2023: 

  • 30% tax credit for residential and commercial solar installation with no cap 
  • Available from 2022 until 2032 (step-down schedule begins in 2033) 
  • Solar batteries, including standalone batteries, are eligible 
  • Can be rolled over if the credit exceeds your tax liability 

Learn more about what the Inflation Reduction Act means for solar and what the Inflation Reduction Act means for commercial businesses. 

The Energy Efficient Home Improvement Tax Credit 

The Energy Efficient Home Improvement Tax Credit is a revival of the old Nonbusiness Energy Property Credit, which expired at the end of 2021. Here’s what you need to know about the new energy efficiency tax credit in 2023: 

  • 30% tax credit for qualifying residential energy efficiency upgrades 
  • Available from 2023 until 2032 
  • Retroactive to projects completed in 2022, but at its original 10% value 
  • $1,200 annual limit (exceptions for certain measures) 

What Services Qualify for the Energy Efficient Home Improvement Tax Credit? 

Energy efficient home improvements can go a long way when it comes to saving energy. The Inflation Reduction Act rewards homeowners who make energy-saving upgrades with tax credits for a wide range of services: 

  • Heat pumps and heat pump water heaters ($2,000 maximum credit)
  • Electrical panel upgrades ($600 maximum credit)
  • Insulation and air sealing ($1,200 maximum credit)
  • Energy efficient HVAC equipment ($600 maximum credit)
  • Energy audits ($150 maximum credit) 
  • Energy efficient exterior windows ($600 maximum credit)
  • Energy efficient exterior doors ($500 maximum credit)

Don’t Miss Out on Tax Savings in 2023

If you’re thinking about going solar and want to maximize your savings, call Boston Solar, the leading solar company near you in Massachusetts. We’ve been installing solar energy systems for over a decade and have completed over 5,000 solar projects. Our team knows how to best utilize incentives like the federal solar tax credit and can help you save as much as possible on your solar installation. 

Get the 30% solar tax credit in 2023. Call 617-858-1645 or contact us to schedule a solar consultation. 

Your Guide to Solar & Energy Efficiency Tax Credits in 2023

Get a 30% tax credit when you go solar in 2023!
Schedule a free consultation to learn more. 

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