Save Money With the Renewable Energy Tax Credit

by | Mar 28, 2023 | Tax Credit

Do you like the idea of using energy efficient solutions to warm your home? Are you warm to the idea of fostering a cozier home atmosphere, complete with the crackle, flicker, and ambiance of a beautiful new home heating appliance?

a leaf, a lightbulb, and a graph of A-D ratingsRenewable energy is becoming increasingly popular in the United States – and for good reason. Not only is it better for the environment, it has the added benefit of saving you money on your energy bills.

If you’ve been contemplating increasing the comfort factor of your home in an energy efficient way, now is a great time to act.

Why? Because of the renewable energy tax credit, which can save you money while you improve your home. Upgrades for energy efficiency pay themselves off over time, but there is an initial cost involved with having a new unit installed. The tax credit adds the advantage of offsetting a portion of those initial costs. 

While it’s important to consult a tax professional for guidance on specific issues, here’s the gist of what you can expect from the renewable energy tax credit…

What Is the Renewable Energy Tax Credit of 2023?

The tax credit, effective from January of 2023, is for those buying wood or pellet stoves. It’s a federal credit that’s designed to encourage the use of renewable energy sources in homes and businesses. Consumers buying highly efficient stoves may be eligible for a 30 percent tax credit based on the cost of the heater. This credit is based on the full cost of the unit, and is capped at $2,000 per year. That means that when tax season rolls around, you can reduce your total tax bill by up to $2,000 while making your home more cozy. Sounds like a win!

Consumers buying highly efficient stoves may be eligible for a 30 percent tax credit based on the cost of the heater.

Are gas units eligible? 

a calculator with a sticky note on it that says "tax credits"If you’ve been in the market for a gas-fueled unit, you may be wondering if the renewable energy tax credit would apply to that purchase.

Unfortunately, the answer is no, this tax credit is not available for natural gas stoves. It’s specific to wood-burning units. Because wood is a renewal resource, heating appliances that burn it line up with the objectives of the credit. Keep in mind that wood-burning stoves have a great deal to recommend them, however!

What are the efficiency requirements?

If you want to take advantage of the tax credit, be sure to do your homework on the specific requirements involved. For instance, any wood-burning appliance you’re considering having installed must be highly efficient – with a thermal efficiency rating of at least 75 percent per the higher heating value of the fuel – in order to be eligible for the tax credit. This rating measures how efficiently the heater converts wood into heat. A higher rating means that the heater is more efficient and will therefore require less wood to produce the same amount of heat.

This is good news for the savvy homeowner. Not only does the tax credit increase the affordability of installing an excellent heater, the unit will also continue saving you money on your heating bill for years to come due to the level of efficiency with which it operates.

Do installation costs qualify?

You may be wondering if installation costs are eligible for the tax credit, or only the cost of the unit itself. Installation costs – and sales tax – can be included. This should include labor costs such as any venting or wiring, assembly, and actual original installation of the unit.

Do I need a manufacturer’s certification statement?

While it’s not a stated requirement to have a manufacturer’s certification statement in order to claim the credit, it is advisable to have it if at all possible. If it isn’t, save the section of the unit manual that states the efficiency rating for your records.

Ready to Make Your Move? Give Us a Call

If you’re ready to take advantage of the renewable energy credit, we’re here to answer any questions you may have about the wood-burning products on the market and the installation process. We’re a factory-authorized dealer of a number of best-selling, attractive, and efficient wood burning appliances, such as Hearthstone, Regency, Jotul, Pacific Energy, and Supreme.

As industry pros who know these systems well, we’re well equipped to speak to what different systems have to offer.

In addition to selling top-of-the-line, efficient wood-burning appliances, we’re also equipped to handle your installation needs, as well. How can you be sure? We’re experienced and CSIA certified, and our many satisfied customers will attest to our professionalism and attention to detail. We pride ourselves on excellence. Whether it’s a new construction or an install in an existing masonry fireplace, we’ve got you covered!

Call 919-747-1859 or book online today.

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