Research Outline

Energy Tax Credits at Local, State, and Federal Levels


Identify what energy tax credits and rebates are available at the local, state, and federal levels to choose materials and equipment for a new energy-efficient home near Coldwater, MI.

Early Findings

Federal Energy Tax Credits

  • The Solar Investment Tax Credit (ITC) currently allows homeowners to receive a 26 percent tax credit for solar systems installed on residential and commercial properties. The tax credit will drop to 22 percent for home projects that begin construction in 2021. From 2022 and onward, homeowners will not receive a federal credit for residential solar energy systems.
  • The Federal Energy Policy Act of 2005 provides tax credits of up to $2,000 for homes that are built or manufactured by December 31, 2020. Home builders are eligible for the tax credit if their home "achieves 50 percent energy savings for heating and cooling over the 2006 International Energy Conservation Code (IECC)," and at least 20 percent of the energy savings must come from "building envelope improvements." Additionally, those who manufacture a new home that complies to "Federal Manufactured Home Construction and Safety Standards" and achieves "30 percent energy savings for heating and cooling over the 2006 IECC and supplements" will receive a $1,000 tax credit.
  • FHA's Energy Efficient Mortgage program qualifies borrowers for a higher loan amount if homeowners make cost-effective energy improvements to their property.

State Energy Tax Credits

  • The Great Lakes Energy - Residential Energy Efficiency Rebate Program provides residential customers with rebates for purchasing air-source or geothermal heat pumps. A $500 rebate is offered for geothermal heat pumps, while a rebate of $250 is available for air-source heat pumps.
  • To help homeowners reduce their energy costs, the Efficiency United program offers rebates to customers on energy-efficient furnaces, boilers, natural gas water heaters, thermostats, windows, and doors. Eighteen energy providers are part of the program.
  • Through the Energy Optimization program, 13 utility companies provide "residential electric incentives" to homeowners who have implemented energy-saving measures.
  • The Lean and Green Michigan Property-Assessed Clean Energy (PACE) program allows property owners "to finance energy improvements with no upfront costs." A project's cost is repaid through an "assessment on the property over a period of years."

Local Energy Tax Credit

  • The Coldwater Board of Public Utilities (CBPU) offers rebates to residential customers who "install energy-efficient appliances and energy-saving measures." The incentives are available for Energy Star TV, LED lamps, refrigerators, programmable thermostats, freezers, dishwashers, air conditioners, clothes washer/dryer, dehumidifiers, heat pump water heaters, ceiling fans, and furnace fan ECM motors.