List of Energy-Saving Home Improvements That Can Be Deducted

Windows, Doors and Skylights

• Updating old windows, doors and skylights is one of the simplest ways to improve the energy efficiency of a home. Ten percent of the cost of new Energy Star exterior windows, doors and skylights--excluding labor and installation costs--is deductible. The maximum total deductible amount for all such improvements is $500. Windows alone are capped at $200.

Insulation

• Adding insulation to your home is another big energy saver. If, after installation, your home meets the International Energy Conservation Code (IECC), you can deduct 10 percent of the cost of the insulation, up to $500, not including labor and installation fees.

Cool Roof

• Roofing materials designed to keep roofs cool and reduce heat gain also reduce summer cooling loads. These roofing materials might be tax-deductible if they are Energy Star products. The deduction is 10 percent of the material costs, excluding installation and labor, up to $500.

Water Heater

• Storage tank water heaters and traditional electric water heaters are inefficient. The government offers a $300 tax credit for upgrading to qualifying efficient water heaters such as gas tankless and electric heat pump water heaters. This credit includes installation costs.

HVAC

• Heating, ventilation and air-conditioning efficiency has a large impact on home energy consumption. Tax deductions are available for replacing old equipment with new efficient systems. Credits range from $50 to $300, depending on the system. You may have to replace both your air conditioning and heating systems to be eligible.

Renewable Energy Systems

• Renewable energy systems for homes include solar, wind and geothermal power. If you install one of these systems for your home, you may be eligible for a tax credit of 30 percent of the cost of the system, including installation costs, with no upper limit. Solar systems include both water heating and photovoltaic systems.