Frequently asked questions about energy efficient home improvements and residential clean energy property credits - Energy efficiency requirements

Updated FAQs were released to the public in Fact Sheet 2024-15 PDF, April 17, 2024.

Q1. What energy efficiency requirements must be met to qualify for the Energy Efficient Home Improvement Credit? (updated December 8, 2023)

A1. The following energy efficiency requirements must be met to qualify for the Energy Efficient Home Improvement Credit:

• Exterior doors: must meet applicable Energy Star requirements.
• Windows and skylights: must meet Energy Star most efficient certification requirements.
• Insulation materials or systems and air sealing materials or systems: must meet the criteria established by the International Energy Conservation Code (IECC) standard in effect at the start of the year that is two years prior to the year the materials or systems are placed in service. For example, materials or systems placed in service in 2025 must meet the criteria established by the IECC standard in effect on January 1, 2023, to qualify for the Energy Efficient Home Improvement Credit in 2025.
• Electric or natural gas heat pumps, electric or natural gas heat pump water heaters, central air conditioners, natural gas or propane or oil water heaters, natural gas or propane or oil furnaces or hot water boilers: must meet or exceed the highest efficiency tier (not including any advanced tier) established by the Consortium for Energy Efficiency (CEE) that is in effect as of the beginning of the year in which the property is placed in service. See the CEE Directory of Efficient Equipment for a searchable database of qualifying equipment.  The right-side bar contains links for heat pumps, air conditioners, furnaces and boilers, and water heaters.  That database contains the brand name and model number for qualifying equipment.  
• Oil furnaces or hot water boilers can alternately qualify if they (1) meet or exceed 2021 Energy Star efficiency criteria and are rated by the manufacturer for use with fuel blends at least 20 percent of the volume of which consists of an eligible fuel; or (2) if placed in service after December 31, 2026, achieves an annual fuel efficiency rate of not less than 90 and is rated by the manufacturer for use with fuel blends at least 50 percent of which consists of an eligible fuel.
• Biomass stove or biomass boilers: must have a thermal efficiency rating of at least 75% (measured by the higher heating value of the fuel).
• Panelboards, sub-panelboards, branch circuits, or feeders: must be installed according to the National Electric Code and have a load capacity of 200 amps or greater.

Q2. What energy efficiency requirements must be met to qualify for the Residential Clean Energy Property Credit? (added December 22, 2022)

A2. The following energy efficiency requirements must be met to qualify for the Residential Clean Energy Property Credit:

• Solar water heating property: must be certified for performance by the non-profit Solar Rating Certification Corporation or a comparable entity endorsed by the government of the State in which such property is installed.
• Geothermal heat pump property: must meet the requirements of the Energy Star program which are in effect at the time that the expenditure for such equipment is made.
• Battery storage technology property: must have a capacity of 3 kilowatt-hours or greater.