2018 energy tax credits that can save you money

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2018 energy tax credits

Home energy upgrades can reduce your monthly electric bills, but they don’t always come cheap. Whether you’re interested in solar, energy efficiency, electric cars, or all of the above, there are energy tax credits available in 2018 that will make home energy upgrades easier on your wallet.

Electric car tax credits

Electric cars are getting better every year, but they are still a relatively new technology – and one with a higher price tag than comparable gas-powered cars. In recognition of this, federal and state governments offer tax credits to people who buy electric vehicles.

Federal tax credit for electric cars

The Qualified Plug-in Electric Drive Motor Vehicle Tax Credit is the main federal incentive program for electric cars available in the United States. Most electric cars are eligible for this tax credit, which reduces your federal tax burden by $7,500.

This tax credit has a “phase out” built into the program that is dependent on the manufacturer of the car. Once a manufacturer has sold 200,000 eligible electric cars, you won’t be able to use the tax credit when you buy an electric car from that manufacturer.

Based on current sales projections, most electric car manufacturers will still be eligible for this tax credit through 2018. A notable exception is Tesla – the company has stated that they aim to produce 500,000 vehicles by the end of 2018. If you’re thinking about buying a Tesla, Chevy Volt or Bolt, or a Nissan Leaf – some of the top-selling electric cars in the U.S. – your safest bet is to buy soon if you want to take advantage of this credit.

State tax credits for electric cars

In addition to the Qualified Plug-in Electric Drive Motor Vehicle Tax Credit, there are plenty of state and local tax credits for electric cars available. This includes credits for buying electric cars as well as for installing electric car chargers at your home or business – check out EnergySage’s list of state and local tax credits for electric cars to see what’s available in your area.

Energy efficiency tax credits

Federal tax credits for energy efficiency expired at the end of 2016, but that doesn’t mean you’re out of luck. Many states offer energy efficiency tax incentives, often in the form of sales or property tax exemptions for purchasing or installing qualifying equipment.

Other financial incentives for energy efficiency

Another common financial incentive for energy efficiency comes from your local utility. Many utilities provide rebates for energy efficient purchases covering a wide range of appliances, building products, electronics, heating and cooling equipment, lighting, fans, pool pumps, and water heaters.

Some rebates are available immediately after purchases, whereas others are available only after installation has been completed. The total rebate amount also depends on the product, going as low as $10 for CFL lightbulbs or up to around $1,000 for larger equipment. You can find available rebates using the Department of Energy’s database of energy efficiency tax credits, rebates and savings.

Tax credits for solar energy systems

One of the biggest energy tax credits available to homeowners and businesses alike in 2018 is the investment tax credit for solar. This credit applies both to solar panel systems and solar hot water systems, and is worth 30 percent of the cost of buying and installing a solar system.

Congress extended this credit at the end of 2015, so you have until the end of 2019 to claim the full 30 percent benefit. After that, the value reduces by a few percentage points a year until 2022, when it goes away entirely for homeowners and falls to 10 percent for commercial system owners.

The federal tax credit for solar is a major incentive available across the United States, but there are other incentives that may be available to you if you want to install solar, including state tax credits and cash rebates. Use EnergySage’s Solar Calculator to get an idea of the incentives available in your area, along with estimated solar prices and long-term solar savings.


5 thoughts on “2018 energy tax credits that can save you money

  1. Marion

    Can I claim a tax credit for solar panels and an electric car (plugin)?
    If so, since my federal taxes are not that high to cover both, can I make use of the electric car/ plugin hybrid in 2018 and defer the solar tax credit to 2019-2021?

  2. Traci

    We are building a houses next door to us for our parents. We own the property and the house. Our parents will be considered renters, so this is our second home. It’s heated with solar radiant heat. How can we get a tax credit? We won’t live in the house, but we are paying for the construction

  3. Alex

    Solar tax credit can be carried over to 2019 tax return filing. There is no written regulation by IRS yet if it can be carried over after 2020.

    I do not know how tax credit for electric car can be handled.

  4. Hugo Wende

    I tried getting my taxes done last week but my accountant could not finish the process because she said the energy efficient tax was not yet available from the IRS and that i had to wait until they sent me an email. Does anyone know what that means?

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