Amended 2022
- 2022 Pub. L. 117-169 Pub. L. 117–169, § 13302(c)(2), substituted “clean energy credit” for “energy efficient property” in section catchline.
(a) Allowance of credit In the case of an individual, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the sum of the applicable percentages of—
Amended 2018
- 2018 Pub. L. 115-123 Pub. L. 115–123, § 40402(b)(1), substituted “the sum of the applicable percentages of—”, pars. (1) to (5), and concluding provisions for “the sum of—
“(1) the applicable percentage of the qualified solar electric property expenditures made by the taxpayer during such year,
“(2) the applicable percentage of the qualified solar water heating property expenditures made by the taxpayer during such year,
“(3) 30 percent of the qualified fuel cell property expenditures made by the taxpayer during such year,
“(4) 30 percent of the qualified small wind energy property expenditures made by the taxpayer during such year, and
“(5) 30 percent of the qualified geothermal heat pump property expenditures made by the taxpayer during such year.”
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(1) the qualified solar electric property expenditures,
Amended 2006, 2015
- 2015 Pub. L. 114-113 Pub. L. 114–113, § 304(a)(1), substituted “the applicable percentage” for “30 percent”.
- 2006 Pub. L. 109-432 Pub. L. 109–432, § 206(b)(1), substituted “solar electric property expenditures” for “photovoltaic property expenditures”.
(2) the qualified solar water heating property expenditures,
Amended 2015
- 2015 Pub. L. 114-113 Pub. L. 114–113, § 304(a)(1), substituted “the applicable percentage” for “30 percent”.
(4) the qualified small wind energy property expenditures,
Amended 2008
- 2008 Pub. L. 110-343 Pub. L. 110–343, § 106(c)(1), added par. (4).
(5) the qualified geothermal heat pump property expenditures, and
Amended 2008
- 2008 Pub. L. 110-343 Pub. L. 110–343, § 106(d)(1), added par. (5).
(6) the qualified battery storage technology expenditures,
Amended 2020, 2022
- 2022 Pub. L. 117-169 Pub. L. 117–169, § 13302(b)(1), amended par. (6) generally. Prior to amendment, par. (6) read as follows: “the qualified biomass fuel property expenditures, and”.
- 2020 Pub. L. 116-260 Pub. L. 116–260, § 148(b)(1), added par. (6).
made by the taxpayer during such year.
(b) Limitations
(1) Maximum credit for fuel cells In the case of any qualified fuel cell property expenditure, the credit allowed under subsection (a) (determined without regard to subsection (c)) for any taxable year shall not exceed $500 with respect to each half kilowatt of capacity of the qualified fuel cell property (as defined in section 48(c)(1)) to which such expenditure relates.
Amended 2005, 2006, 2008, 2009
- 2009 Pub. L. 111-5 Pub. L. 111–5, § 1122(a)(1), amended par. (1) generally. Prior to amendment, par. (1) related to maximum credit with respect to qualified solar water heating property expenditures, qualified fuel cell property, qualified small wind energy property expenditures, and qualified geothermal heat pump property expenditures.
- 2008 Pub. L. 110-343 Pub. L. 110–343, § 106(b)(1), amended par. (1) as amended by Pub. L. 110–343, § 106(c)(2) and (d)(2), by redesignating subpars. (B) to (E) as (A) to (D), respectively, and striking out former subpar. (A) which read as follows: “$2,000 with respect to any qualified solar electric property expenditures,”.
- 2008 Pub. L. 110-343 Pub. L. 110–343, § 106(c)(2), added subpar. (D).
- 2008 Pub. L. 110-343 Pub. L. 110–343, § 106(d)(2), added subpar. (E).
- 2006 Pub. L. 109-432 Pub. L. 109–432, § 206(b)(1), substituted “solar electric property expenditures” for “photovoltaic property expenditures”.
- 2005 Pub. L. 109-135 Pub. L. 109–135, § 402(i)(1), inserted “(determined without regard to subsection (c))” after “subsection (a)” in introductory provisions.
(2) Certification of solar water heating property No credit shall be allowed under this section for an item of property described in subsection (d)(1) unless such property is 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.
(c) Carryforward of unused credit If the credit allowable under subsection (a) exceeds the limitation imposed by section 26(a) for such taxable year reduced by the sum of the credits allowable under this subpart (other than this section), such excess shall be carried to the succeeding taxable year and added to the credit allowable under subsection (a) for such succeeding taxable year.
Amended 2005, 2008, 2013
- 2013 Pub. L. 112-240 Pub. L. 112–240 amended subsec. (c) generally. Prior to amendment, subsec. (c) related to limitation based on amount of tax and carryforward of unused credit.
- 2008 Pub. L. 110-343 Pub. L. 110–343, § 106(e)(1), amended heading and text of subsec. (c) generally. Prior to amendment, subsec. (c) related to carryforward of unused credit.
- 2005 Pub. L. 109-135 Pub. L. 109–135, § 402(i)(3)(E), reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “If the credit allowable under subsection (a) exceeds the limitation imposed by section 26(a) for such taxable year reduced by the sum of the credits allowable under this subpart (other than this section), such excess shall be carried to the succeeding taxable year and added to the credit allowable under subsection (a) for such succeeding taxable year.”
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(d) Definitions For purposes of this section—
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(1) Qualified solar water heating property expenditure The term “qualified solar water heating property expenditure” means an expenditure for property to heat water for use in a dwelling unit located in the United States and used as a residence by the taxpayer if at least half of the energy used by such property for such purpose is derived from the sun.
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(2) Qualified solar electric property expenditure The term “qualified solar electric property expenditure” means an expenditure for property which uses solar energy to generate electricity for use in a dwelling unit located in the United States and used as a residence by the taxpayer.
Amended 2006
- 2006 Pub. L. 109-432 Pub. L. 109–432, § 206(b)(2), substituted “solar electric property expenditure” for “photovoltaic property expenditure” in heading and text.
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(3) Qualified fuel cell property expenditure The term “qualified fuel cell property expenditure” means an expenditure for qualified fuel cell property (as defined in section 48(c)(1), without regard to subparagraph (D) thereof) installed on or in connection with a dwelling unit located in the United States and used as a principal residence (within the meaning of section 121) by the taxpayer.
Amended 2022
- 2022 Pub. L. 117-169 Pub. L. 117–169, § 13302(c)(1), inserted “, without regard to subparagraph (D) thereof” after “section 48(c)(1)”.
(4) Qualified small wind energy property expenditure The term “qualified small wind energy property expenditure” means an expenditure for property which uses a wind turbine to generate electricity for use in connection with a dwelling unit located in the United States and used as a residence by the taxpayer.
Amended 2008
- 2008 Pub. L. 110-343 Pub. L. 110–343, § 106(c)(3)(A), added par. (4).
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(5) Qualified geothermal heat pump property expenditure
Amended 2008
- 2008 Pub. L. 110-343 Pub. L. 110–343, § 106(d)(3), added par. (5).
(A) In general The term “qualified geothermal heat pump property expenditure” means an expenditure for qualified geothermal heat pump property installed on or in connection with a dwelling unit located in the United States and used as a residence by the taxpayer.
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(B) Qualified geothermal heat pump property The term “qualified geothermal heat pump property” means any equipment which—
(i) uses the ground or ground water as a thermal energy source to heat the dwelling unit referred to in subparagraph (A) or as a thermal energy sink to cool such dwelling unit, and
(ii) meets the requirements of the Energy Star program which are in effect at the time that the expenditure for such equipment is made.
(6) Qualified battery storage technology expenditure The term “qualified battery storage technology expenditure” means an expenditure for battery storage technology which—
Amended 2020, 2022
- 2022 Pub. L. 117-169 Pub. L. 117–169, § 13302(b)(2), amended par. (6) generally. Prior to amendment, text read as follows:
- 2022 “(A) In general.—The term ‘qualified biomass fuel property expenditure’ means an expenditure for property—
“(i) which uses the burning of biomass fuel to heat a dwelling unit located in the United States and used as a residence by the taxpayer, or to heat water for use in such a dwelling unit, and
“(ii) which has a thermal efficiency rating of at least 75 percent (measured by the higher heating value of the fuel).
- 2022 “(B) Biomass fuel.—For purposes of this section, the term ‘biomass fuel’ means any plant-derived fuel available on a renewable or recurring basis.”
- 2020 Pub. L. 116-260 Pub. L. 116–260, § 148(b)(2), added par. (6).
(e) Special rules For purposes of this section—
Amended 2009
- 2009 Pub. L. 111-5 Pub. L. 111–5, § 1103(b)(2)(B), struck out par. (9). Text read as follows: “For purposes of determining the amount of expenditures made by any individual with respect to any dwelling unit, there shall not be taken into account expenditures which are made from subsidized energy financing (as defined in section 48(a)(4)(C)).”
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(1) Labor costs Expenditures for labor costs properly allocable to the onsite preparation, assembly, or original installation of the property described in subsection (d) and for piping or wiring to interconnect such property to the dwelling unit shall be taken into account for purposes of this section.
(2) Solar panels No expenditure relating to a solar panel or other property installed as a roof (or portion thereof) shall fail to be treated as property described in paragraph (1) or (2) of subsection (d) solely because it constitutes a structural component of the structure on which it is installed.
(3) Swimming pools, etc., used as storage medium Expenditures which are properly allocable to a swimming pool, hot tub, or any other energy storage medium which has a function other than the function of such storage shall not be taken into account for purposes of this section.
(4) Fuel cell expenditure limitations in case of joint occupancy In the case of any dwelling unit with respect to which qualified fuel cell property expenditures are made and which is jointly occupied and used during any calendar year as a residence by two or more individuals, the following rules shall apply:
Amended 2009
- 2009 Pub. L. 111-5 Pub. L. 111–5, § 1122(a)(2)(A), added par. heading and introductory provisions and struck out former heading and introductory provisions. Former introductory provisions read as follows: “In the case of any dwelling unit which is jointly occupied and used during any calendar year as a residence by two or more individuals the following rules shall apply:”.
- 2009 Pub. L. 111-5 Pub. L. 111–5, § 1122(a)(2)(B), struck out subpar. (C) which read as follows: “Subparagraphs (A) and (B) shall be applied separately with respect to expenditures described in paragraphs (1), (2), and (3) of subsection (d).”
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(A) Maximum expenditures for fuel cells The maximum amount of such expenditures which may be taken into account under subsection (a) by all such individuals with respect to such dwelling unit during such calendar year shall be $1,667 in the case of each half kilowatt of capacity of qualified fuel cell property (as defined in section 48(c)(1)) with respect to which such expenditures relate.
Amended 2005, 2006, 2008, 2009
- 2009 Pub. L. 111-5 Pub. L. 111–5, § 1122(a)(2)(A), added subpar. (A) and struck out former subpar. (A) which related to maximum amount of expenditures allowed for credit in jointly occupied dwelling units with respect to qualified solar water heating property expenditures, qualified fuel cell property, qualified small wind energy property expenditures, and qualified geothermal heat pump property expenditures.
- 2008 Pub. L. 110-343 Pub. L. 110–343, § 106(b)(2), amended subpar. (A) as amended by Pub. L. 110–343, § 106(c)(4) and (d)(4), by redesignating cls. (ii) to (v) as (i) to (iv), respectively, and striking out former cl. (i) which read as follows: “$6,667 in the case of any qualified solar electric property expenditures,”.
- 2008 Pub. L. 110-343 Pub. L. 110–343, § 106(c)(4), added cl. (iv).
- 2008 Pub. L. 110-343 Pub. L. 110–343, § 106(d)(4), added cl. (v).
- 2006 Pub. L. 109-432 Pub. L. 109–432, § 206(b)(1), substituted “solar electric property expenditures” for “photovoltaic property expenditures”.
- 2005 Pub. L. 109-135 Pub. L. 109–135, § 402(i)(2), amended subpars. (A) and (B) generally. Prior to amendment, subpars. (A) and (B) read as follows:
- 2005 “(A) The amount of the credit allowable, under subsection (a) by reason of expenditures (as the case may be) made during such calendar year by any of such individuals with respect to such dwelling unit shall be determined by treating all of such individuals as 1 taxpayer whose taxable year is such calendar year.
- 2005 “(B) There shall be allowable, with respect to such expenditures to each of such individuals, a credit under subsection (a) for the taxable year in which such calendar year ends in an amount which bears the same ratio to the amount determined under subparagraph (A) as the amount of such expenditures made by such individual during such calendar year bears to the aggregate of such expenditures made by all of such individuals during such calendar year.”
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(B) Allocation of expenditures The expenditures allocated to any individual for the taxable year in which such calendar year ends shall be an amount equal to the lesser of—
Amended 2005
- 2005 Pub. L. 109-135 Pub. L. 109–135, § 402(i)(2), amended subpars. (A) and (B) generally. Prior to amendment, subpars. (A) and (B) read as follows:
- 2005 “(A) The amount of the credit allowable, under subsection (a) by reason of expenditures (as the case may be) made during such calendar year by any of such individuals with respect to such dwelling unit shall be determined by treating all of such individuals as 1 taxpayer whose taxable year is such calendar year.
- 2005 “(B) There shall be allowable, with respect to such expenditures to each of such individuals, a credit under subsection (a) for the taxable year in which such calendar year ends in an amount which bears the same ratio to the amount determined under subparagraph (A) as the amount of such expenditures made by such individual during such calendar year bears to the aggregate of such expenditures made by all of such individuals during such calendar year.”
(i) the amount of expenditures made by such individual with respect to such dwelling during such calendar year, or
(ii) the maximum amount of such expenditures set forth in subparagraph (A) multiplied by a fraction—
(I) the numerator of which is the amount of such expenditures with respect to such dwelling made by such individual during such calendar year, and
(II) the denominator of which is the total expenditures made by all such individuals with respect to such dwelling during such calendar year.
(5) Tenant-stockholder in cooperative housing corporation In the case of an individual who is a tenant-stockholder (as defined in section 216) in a cooperative housing corporation (as defined in such section), such individual shall be treated as having made his tenant-stockholder’s proportionate share (as defined in section 216(b)(3)) of any expenditures of such corporation.
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(6) Condominiums
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(A) In general In the case of an individual who is a member of a condominium management association with respect to a condominium which the individual owns, such individual shall be treated as having made the individual’s proportionate share of any expenditures of such association.
(B) Condominium management association For purposes of this paragraph, the term “condominium management association” means an organization which meets the requirements of paragraph (1) of section 528(c) (other than subparagraph (E) thereof) with respect to a condominium project substantially all of the units of which are used as residences.
“Substantially” implies facts and circumstances. No regulation cites this provision (eCFR, Oct 19, 2026)
(7) Allocation in certain cases If less than 80 percent of the use of an item is for nonbusiness purposes, only that portion of the expenditures for such item which is properly allocable to use for nonbusiness purposes shall be taken into account.
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(8) When expenditure made; amount of expenditure
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(A) In general Except as provided in subparagraph (B), an expenditure with respect to an item shall be treated as made when the original installation of the item is completed.
(B) Expenditures part of building construction In the case of an expenditure in connection with the construction or reconstruction of a structure, such expenditure shall be treated as made when the original use of the constructed or reconstructed structure by the taxpayer begins.
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(f) Basis adjustments For purposes of this subtitle, if a credit is allowed under this section for any expenditure with respect to any property, the increase in the basis of such property which would (but for this subsection) result from such expenditure shall be reduced by the amount of the credit so allowed.
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(g) Applicable percentage For purposes of subsection (a), the applicable percentage shall be—
Amended 2006, 2008, 2015, 2018, 2022, 2025
- 2025 Pub. L. 119-21 Pub. L. 119–21, § 70506(b)(1), (3), struck out pars. (4) and (5) which read as follows:
- 2025 “(4) in the case of property placed in service after December 31, 2032, and before January 1, 2034, 26 percent, and
- 2025 “(5) in the case of property placed in service after December 31, 2033, and before January 1, 2035, 22 percent.”
- 2022 Pub. L. 117-169 Pub. L. 117–169, § 13302(a)(2)(B), added pars. (3) to (5) and struck out former par. (3) which read as follows: “in the case of property placed in service after December 31, 2022, and before January 1, 2024, 22 percent.”
- 2018 Pub. L. 115-123 Pub. L. 115–123, § 40402(b)(2), struck out “paragraphs (1) and (2) of” before “subsection (a),” in introductory provisions.
- 2015 Pub. L. 114-113 Pub. L. 114–113, § 304(a)(4), added subsec. (g). Former subsec. (g) redesignated (h).
- 2015 Pub. L. 114-113 Pub. L. 114–113, § 304(a)(2), inserted “(December 31, 2021, in the case of any qualified solar electric property expenditures and qualified solar water heating property expenditures)” before period at end.
- 2008 Pub. L. 110-343 Pub. L. 110–343, § 106(a), substituted “December 31, 2016” for “December 31, 2008”.
- 2006 Pub. L. 109-432 Pub. L. 109–432, § 206(a), substituted “2008” for “2007”.
(1) in the case of property placed in service after December 31, 2016, and before January 1, 2020, 30 percent,
(2) in the case of property placed in service after December 31, 2019, and before January 1, 2022, 26 percent, and
Amended 2020, 2022
- 2022 Pub. L. 117-169 Pub. L. 117–169, § 13302(a)(2)(A), substituted “before January 1, 2022, 26 percent,” for “before January 1, 2023, 26 percent, and”.
- 2020 Pub. L. 116-260 Pub. L. 116–260, § 148(a)(2)(A), substituted “January 1, 2023” for “January 1, 2021”.
(3) in the case of property placed in service after December 31, 2021, 30 percent.
Amended 2020, 2022, 2025
- 2025 Pub. L. 119-21 Pub. L. 119–21, § 70506(b)(2), substituted “30 percent.” for “and before January 1, 2033, 30 percent,”.
- 2022 Pub. L. 117-169 Pub. L. 117–169, § 13302(a)(2)(B), added pars. (3) to (5) and struck out former par. (3) which read as follows: “in the case of property placed in service after December 31, 2022, and before January 1, 2024, 22 percent.”
- 2020 Pub. L. 116-260 Pub. L. 116–260, § 148(a)(2)(B), substituted “after December 31, 2022, and before January 1, 2024” for “after December 31, 2020, and before January 1, 2022”.
(h) Termination The credit allowed under this section shall not apply with respect to any expenditures made after December 31, 2025.
Amended 2015, 2018, 2020, 2022, 2025
- 2025 Pub. L. 119-21 Pub. L. 119–21, § 70506(a), substituted “with respect to any expenditures made after December 31, 2025” for “to property placed in service after December 31, 2034”.
- 2022 Pub. L. 117-169 Pub. L. 117–169, § 13302(a)(1), substituted “December 31, 2034” for “December 31, 2023”.
- 2020 Pub. L. 116-260 Pub. L. 116–260, § 148(a)(1), substituted “December 31, 2023” for “December 31, 2021”.
- 2018 Pub. L. 115-123 Pub. L. 115–123, § 40402(a), substituted “December 31, 2021.” for “December 31, 2016 (December 31, 2021, in the case of any qualified solar electric property expenditures and qualified solar water heating property expenditures).”
- 2015 Pub. L. 114-113 Pub. L. 114–113, § 304(a)(3), redesignated subsec. (g) as (h).