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Federal Energy Credits for 2019

The Bipartisan Budget Act of 2018 “reinstated the tax credit for fuel cells, small wind, and geothermal heat pumps. The tax credit for all technologies now features a gradual step down in the credit value,” according to the US Department of Energy.

Federal tax credits for efficient air-source heat pumps and gas furnace ended in 2016.

This brief guide explains the federal energy tax credits and how to obtain yours.

Qualifying Equipment for the Federal Energy Tax Credit

Three categories of equipment are listed.

Fuel Cells

These are solar fuel cells and solar energy systems.

The most common types of crystalline photovoltaic cells arranged in a solar panel. The panels are mounted on the roof or ground. They remain the most cost-effective PV system type.

BIPV, building-integrated photovoltaic, technology is a growing field. Rather than arranging the cells in traditional panels, they are integrated into roofing material. The result is a lower profile – better aesthetics.

[Image: CertainTeed Apollo II]

Top BIPV products include CertainTeed Apollo II shingles and tiles, SunTegra shingles and tiles and RGS Powerhouse shingles.

[Image: RGS Powerhouse Shingles]

Cost: Prices have dropped to a range of about $2.85-$3.35 per watt for traditional solar panel PV systems. That means a 6,000 watt (6kW) system would cost about $18,000.

According to Roofing Calc cost ranges from about $3.85-$6.50 per watt.

Tesla is making a solar tile too. Its aesthetics are wonderful, but the roofs are costly at about $8.50 per watt. Tesla continues to experience problems with the roll-out of the product.

Small wind

These are residential-scale wind turbines and similar equipment that can generate electricity for your home. If you go this route, be sure the equipment is certified at a location like the National Wind Technology Center or a regional test center.

Wind � Good Energies Alliance Ireland

Learn more about small wind federal tax credits in this article from the Department of Energy.

Cost: According to Bergey Windpower, a 10kW system costs between $48,000 and $65,000, but many homes won’t need one that large. Most homes would require 5kW to 8kW to operate.


These are typically heat pumps, also called ground-source heat pumps as opposed to the more common air-source equipment.

There are many system designs including open and closed loops, vertical and horizontal loop installation. These options result in a wide range of cost factors.

Geothermal Heat Pumps - Carolina Country

[Image: Types of geothermal loops]

Here’s a good starting point for learning more about geothermal.

Cost: Starting at about $8.500, most geothermal systems cost $12,000 to $20,000. Some cost more.

Federal Energy Credits for 2019

This is the last year for full tax credits, at least until there is new legislation.

  • 30% for systems placed in service by 12/31/2019
  • 26% for systems placed in service after 12/31/2019 and before 01/01/2021
  • 22% for systems placed in service after 12/31/2020 and before 01/01/2022

IRS Form for Residential Energy Credits


IRS Form 5695 is a single-page form.

Here is the link to IRS Form 5695 for 2018 taxes.

Here is a link to the instructions for Form 5695.


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