If you haven’t filed your 2023 taxes yet, don’t forget that various home energy efficiency upgrades that you made in 2023 may be eligible for federal tax credits. ENERGY STAR-certified equipment purchased and installed between Jan. 1, 2023, and Dec. 31, 2032 are eligible, and customers can file for them as part of their annual federal income tax return.
Experts recommend starting with a home energy audit, which can identify high-impact areas that should be addressed first. A home energy audit is conducted at your principal residence by a certified home energy auditor, who will write a report listing the most significant and cost-effective energy-efficiency improvements. Homeowners can claim a tax credit of 30% of the price of a home energy audit up to $150. KUA also offers free home energy audits, if you would like to focus your energy-efficiency dollars on other projects.
Many energy audits will recommend starting by upgrading your home’s insulation. Insulation may lose effectiveness over time, but because it’s located between your home’s interior and exterior walls, it can be challenging to see if it has degraded. The EPA has increased insulation tax credits to cover 30% of the project cost, up to $1,200.
In Florida, heat pumps are popular options to cool your home in the summer and keep it warm during the winter. If yours stops working or if your energy audit shows replacing your aging system would be cost-effective, you can install a new higher-efficiency unit for less, thanks to sharply higher ENERGY STAR tax credits. ENERGY STAR-certified heat pumps are eligible for a tax credit of up to 30% of the cost, with a cap of $2,000.
Heat pump water heaters, which combine the benefits of a heat pump with a water heater that heats water for showers, clothes washing, and dishwashing, also are eligible for tax credits equal to 30% of the cost, up to $2,000.
The EPA has limited the number of efficiency upgrades eligible for tax credits to $3,200 per calendar year. So a multi-year approach might make sense. Visit kua.com/save to learn more about ENERGY STAR tax credits.
If you have questions regarding these new incentives, contact the KUA Green Team at [email protected] or call 407-933-9800.