Federal Tax Credit

Federal tax credits are available for a number of home water heating improvements. If the improvements occur at your primary residence (except some instances with solar, where a second home may qualify) and are placed into use before December 31, 2010, you may be eligible to take the credit.

A couple of examples include:

  • Tankless water heaters with at least an input of over 50,000 BTU/hour and up to 200,000 BTU/hour with a rated storage volume of 2 gallons or less and an energy factor of .82 or greater are eligible for a credit of up to 30% of the cost, not to exceed $1,500.
  • Solar water heaters that receive at least half of their energy directly from the sun and have an OG-300 rating from the Solar Rating Certification Corporation (SRCC), and where the water is used in a residential dwelling, are eligible for up to a credit of 30% of the cost, with no limit. This credit is not available for expenses used for swimming pools, hot tubs or whole house heating.

More information on available tax credits for energy-efficient installations can be found on the www.energystar.gov website.