Taking Advantage of Federal Tax Credits

How You Benefit with the Inflation Reduction Act

Starting in 2023, residents in Wisconsin can save more than ever before on energy-efficient home upgrades. Not only will these upgrades save you money on your utility bill, but they may also be eligible for a rebate from Focus on Energy or a federal income tax credit.

In 2022, Congress passed the Inflation Reduction Act. This act includes funding to help people cut their energy use and install renewable energy systems. As of January 1, 2023, new tax credits are available reducing the cost of energy-related home upgrades.

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Credits and Deductions

The Inflation Reduction Act provides federal tax credits and deductions that empower Americans to make homes and buildings more energy efficient, reduce energy costs, and help reduce demand as we transition to cleaner energy sources.

For Homeowners

You may be eligible for an Energy Efficient Home Improvement Credit covering up to 30% of energy-efficient home upgrades (e.g., insulation, furnaces, heat pumps, and more). Plus, you can take advantage of the Residential Clean Energy Property Credit, which provides up to a 30% income tax credit for the purchase and installation of clean energy equipment. There are annual limits on the amount and combination of tax credits a taxpayer can claim. Please visit the IRS website for more information. Focus on Energy rebates are separate from tax credits, and you are encouraged to take advantage of both! See the table below for more information.

Learn About Our Rebates and Incentives
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For Builders (single-family, manufactured, and multifamily homes)

The Section 45L Tax Credit for Energy Efficient New Homes was updated and extended through 2032 and includes $2,500 for ENERGY STAR® certified single-family new homes, $2,500 for ENERGY STAR certified manufactured homes, and $500 per unit for ENERGY STAR certified multifamily units meeting the ENERGY STAR® Multifamily New Construction National program requirements. Larger credits are available for homes certified to Department of Energy’s Zero Energy Ready Home Program or multifamily projects meeting prevailing wage requirements.

Focus on Energy New Home Certification
Available Credits and Rebates

Tax credits are available for the following upgrades, which may also qualify for rebates from Focus on Energy

Item

Federal Tax Credit
(30% of project cost, up to cap listed below)

2024 Focus on Energy Rebate

Insulation

Up to $1,200

Standard
Up to $1,875

Income-Qualified*
Up to $2,550

Home Energy Audit

Up to $150

N/A

Windows & Skylights
(Must meet ENERGY STAR® Most Efficient criteria)

Up to $600

N/A

Exterior Doors

Up to $250 per door

$500 annually

N/A

Air Source Heat Pumps

Up to $2,000

Up to $1,000

Geothermal Heat Pumps

30% of total project cost

Up to $1,000

Central Air Conditioners
ENERGY STAR®

Up to $600

N/A

Furnaces (Natural Gas)

Up to $600
Minimum 97% AFUE

Standard
Up to $150

Income-Qualified*
Up to $550
Minimum 95% AFUE

Furnaces (Oil)

Up to $600

N/A

Hot Water Boilers (Natural Gas) ENERGY STAR®

Up to $600

Standard
Up to $500

Income-Qualified*
Up to $700

Hot Water Boilers (Propane, Oil)

Up to $600

N/A

Biomass Stoves/Boilers

Up to $2,000

N/A

Heat Pump Water Heaters

Up to $2,000

Instant discount available through participating Trade Allies

Water Heaters (Natural Gas)

Up to $600
Requires ENERGY STAR® v5.0 effective 4/18/23

Instant discount available through participating Trade Allies

Solar Energy Systems

30% of total project cost

Up to $500

Customers in specific ZIP codes may receive an additional $500 bonus for solar electric systems

Small Wind Turbines

30% of total project cost

N/A

Battery Storage Technology

30% of total project cost

N/A

Fuel Cells

30% of total project cost

N/A

Electric Panel Upgrades
(Potentially needed for several of the above improvements)

Up to $600

N/A

*You may qualify for higher rebates based on your household’s income. Learn more about income-qualified rebates.
Online Home Assessment Tool

If you’re looking to identify the most helpful upgrades for your home, Focus on Energy provides a free online home assessment. Discover potential upgrades, customized for your home, in under ten minutes. Or receive expert advice to help pinpoint issues in your home. Schedule an in-person home energy assessment with a Focus on Energy Trade Ally.

What to Know

Be sure to consult the Home Energy Tax Credits and Energy Efficient Home Improvement Credit sections of the IRS website and/or your tax professional when planning your project. Note: Focus on Energy rebates may impact the amount of the tax credit for your project. See question four of the IRS’s frequently asked questions for more information.

Home Energy Tax Credits
IRS

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