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Does Your State Reward Energy Efficiency?

Posted by Ben Barnes on December 10, 2013
Does Your State Reward Energy Efficiency?

Homeowners throughout the United States can find incentives for making their homes more energy efficient with federal and state government tax credits. Take a look at the highlights from the states making the most significant investments in energy efficiency.

Alabama: Homeowners in select counties are eligible for a rebate of up to $750 for eligible energy efficient improvements that result in energy savings of at least 20%.

California: Through the CSI-Thermal Low Income Program, the state compensates low-income households that install solar water heating and displace natural gas consumption. Under this program, single-family homes can receive up to $3,750 in rebates.

Georgia: In Georgia, residential consumers have one more year to take advantage of state tax credits on solar water heaters, photovoltaics, wind energy, or geothermal heat pumps. That state offers a tax credit of up to 35% of these systems for single-family homes that expires at the end of 2014. The incentive amount is capped at $2,500 for solar heating, $10,500 for photovoltaics, and $2,000 for heat pumps.

Idaho: Residents of Idaho can deduct 100% of the cost of labor and material for some energy-efficient upgrades, such as installing Energy Star windows, caulking/weather stripping, or adding extra insulation.

Iowa: In the Hawkeye state, you can get a tax credit of 15% of the cost of a solar energy system, or up $3,000.

Kentucky: You can get up to $500 in tax credits for making energy-efficient improvements to your home in Kentucky, such as adding insulation or installing new windows.

Maine: Homeowners can get up to $1,500 in state rebates for upgrades to the insulation or heating system in their homes.

Massachusetts: The state offers a 15% tax credit, or up to $1,000, for the cost of a renewable energy system, such as solar panels or a small wind turbine. This program has been around since 1979!

Minnesota: Starting in 2014, the state of Minnesota will start the Made in Minnesota Solar Thermal Rebate program, which offers rebates for residential solar thermal projects. The rebates cover 25% of the cost of installation, or up to $2,500 for a single-family home.

Missouri: The state of Missouri allows a tax credit equal to $2,000 of the cost of a home energy audit and accompanying energy-efficiency improvements.

Montana: If you install an energy system that runs on something other than fossil fuels (wind, solar, geothermal, etc.) you can apply for a tax credit of up to $500 in Montana.

Nevada: Through EnergyFit Nevada, consumers can get up to $1,000 in rebates if they spend matching funds to make energy efficient improvements to their home, such as weather stripping or adding insulation. To qualify for the funds, consumers also have to achieve 20% energy savings after implementing the changes.

New Hampshire: The state government in New Hampshire offers a rebate for solar water heaters. Depending on the system, you could earn up to $1,900 in rebates.

New York: Get a tax credit for 25%—or up to $5,000—of the cost to install a solar energy system at your residence in New York.

North Carolina: The state allows its residents to claim a tax credit equal to 35% of the cost to construct, purchase, or lease renewable energy property. The amount awarded varies by type of technology and the cap for the incentive is $10,500.

North Dakota: You can recoup 15% of the cost of installing a geothermal system in North Dakota through a state tax credit. The credit expires at the end of 2014.

Oregon: Residents in Oregon can receive up to $1,500 in tax credits for energy-efficient heating or water heating systems, and up to $6,000 for the installation of solar panels or small wind turbines.

Pennsylvania: In the Keystone state, residential customers can get a tax credit of up to 35% of the cost to install photovoltaic or solar thermal systems. But hurry, the tax credit is set to expire Dec. 31, 2013!

Rhode Island: The state of Rhode Island offers a rebate program for residential consumers who install solar panels or solar water heating. Those who qualify can receive 25% of the project costs—a maximum of $10,000—in rebates.

South Carolina: South Carolina offers a tax credit of up to 25% of the cost of purchasing and installing solar heating/cooling, photovoltaic systems, or hydroelectric power. The maximum a resident can take away each year is $3,500.

Texas: Though the state has a renewable energy requirement which mandates that energy companies install wind and solar energy, it hasn't done as much for residential consumers. However, on Memorial Day weekend, the state of Texas has a tax-free weekend for select Energy Star-certified appliances.

Utah: If you install a renewable energy system, such as a wind turbine or solar panels, at your home in Utah you are eligible for a tax credit of 25% or up to $2,000 of the cost of the system. 

Virginia: Residential consumers can receive a tax credit of 20% of the sales tax paid on select Energy Star-qualified appliances.

Incentives From the Federal Government

Though the bulk of federal incentives are for companies, the national government does offer an incentive for homeowners to make energy-efficient improvements. The Residential Energy Efficiency Tax Credit allows homeowners to save 10 to 30% of the cost of qualifying upgrades that were purchased in 2011, 2012, or 2013. All eligible upgrades must be done in your primary residence and the funds are not available for rental units or new construction homes. According to Energy Star, these are the eligible types of upgrades: HVAC systems, insulation, metal or asphalt roofs, non-solar water heaters, biomass stoves, energy efficient windows and doors, geothermal heat pumps, small wind turbines, and solar arrays. (If you've completed one of these eligible upgrades, apply for the tax credit now, the program ends Dec. 31, 2013!)


The U.S. Department of Energy funds a site, the Database of State Incentives for Renewables and Efficiency (DSIRE), which serves as a bank of information for consumers to find details on renewable and energy efficient incentives by state. For a full list of energy efficiency incentives in your state or utility service area, click here.

Ben Barnes is a graduate student with experience in the energy sector.  His work concentrates on efforts to increase the sustainability of renewable energy sources and reduce the carbon footprint in the world we live in.

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