Solar Hot Water Heater and Solar Energy Tax Credits

Solar Water Heater tax credits and other energy efficiency tax credits have been around in some form or fashion since the late 1970's when President Jimmy Carter approved them. Some years have been better than others for the amount of tax credit available for homeowners who install solar water heaters. 2009 is one of the better years for energy efficient home improvement tax credits and it should remain this way until 2016.

With the passing of the American Recovery and Reinvestment Act of 2009, if you are looking to install a solar hot water heater you will be able to receive a 30% tax credit with no cap like there have been in previous years. Previous versions of this tax credit can be found by searching for: The Energy Improvement and Extension Act of 2008, the Energy Policy Act of 2005, and the Tax Relief and Health Care Act of 2006.

What Can You Claim For The Solar Water Heater Tax Credit?

• You may write off installation labor costs, site preparation labor costs, assembly labor costs, expenses to purchase materials needed to connect the solar hot water system to your home such as piping and wires.


• You may claim your tax credit if you install your solar water heater for a primary residence or an investment residential property.


• The equipment installed must meet standards set forth by the Solar Rating Certification Corporation - SRCC, or a state equivalent agency responsible for establishing and enforcing solar rating standards for your home state.


• You may not claim this tax credit if the system is used to heat a pool or hot tub.


• To qualify for this tax credit your solar hot water system must supply at least half the energy needed to heat your water.