Federal Tax Credits Info for Solar Hot Water Heaters Federal Tax Credits Info for Solar Hot Water Heaters

Solar hot water heaters are one of the energy efficient products that are eligible for a federal tax credit. These credits are given to owners who have purchased an EnergyStar product for easing the consumption of energy in homes. While not all EnergyStar compliant appliances are eligible for this type of tax credit, a solar hot water heater is. Here is some information on this tax credit.


The federal tax credit on solar hot water heaters is a credit of up to 30% of the cost of the heater with no upper limit imposed. It is for primary and secondary residences. However, does not apply to those who are renting their home. The tax credit is not available if the solar hot water heater is used for pools, hot tubs, or other outbuildings. The cost of the installation can also be included within the overall tax credit. 


In order to qualify for the EnergyStar federal tax credit the solar hot water heater must receive at least half of its operating power from the sun. The appliance must also have a rating from the Solar Rating and Certification Corporation in order to qualify as an eligible solar heater. 


In order to receive the federal tax credit for solar hot water heaters you need to apply when filing your income taxes with a Form 5695. 

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