2024 Residential Clean Energy Credit
For 2024, the Residential Clean Energy Credit is 30% (Credit rate) and $500 (Fuel cell credit limit, per half kilowatt).
Effective 2024-01-01Source: 2024 Instructions for Form 5695 (IRS)Verified 2026-08-29
Compared with 2023
Every figure on this page is unchanged from 2023.
| Item | 2023 | 2024 | Change |
|---|---|---|---|
| Credit rate | 30% | 30% | +0% (+0.0%) |
| Fuel cell credit limit, per half kilowatt | $500 | $500 | +$0 (+0.0%) |
Who it applies to
Taxpayers who installed qualifying clean energy property in a home they used as a residence during 2024 and are filing IRS Form 5695.
What changed this year, and why
The Residential Clean Energy Credit allows a 30% tax credit for qualified clean energy property installed in a U.S. home in 2024.
Common questions
- What is the credit rate for 2024?
- The credit rate is 30% of the cost of qualified property placed in service during 2024.
- What types of property qualify?
- Qualified solar electric property, solar water heating property, small wind energy property, geothermal heat pump property, battery storage technology, and fuel cell property.
- Are labor costs included?
- Yes. Labor costs for onsite preparation, assembly, and original installation of the property, as well as piping or wiring to interconnect it to the home, are included in the cost basis for the credit.
Every amount on this page is a published figure rather than yours. The Residential clean energy credit calculator takes the number you enter and works it out against them, showing which published figure it used.
What happens when the credit is bigger than your tax
When the Residential Clean Energy Credit you calculate exceeds the tax liability limit for 2024, the excess does not disappear. Instead, the IRS allows you to carry the unused portion forward to the following tax year (2025). This carryforward applies only to the residential clean energy credit and not to the energy efficient home improvement credit, which generally cannot be carried over. You must still file Form 5695 for 2024 even if you cannot use any of your credit in that year because your tax liability is too low. The carryforward gives you an additional opportunity to benefit from your clean energy investment by applying the remaining credit against your 2025 tax liability, subject to that year's tax liability limit. Keep track of the unused amount so you can claim it properly on your 2025 return.
If you can't use all of the credit because of the tax liability limit (that is, line 14 is less than line 13), you can carry the unused portion of the credit to 2025.
2024 Instructions for Form 5695 (IRS)
Business use of the property can cut the credit
The Residential Clean Energy Credit requires that at least 80% of the use of an item be for nonbusiness purposes. If this threshold is not met, only the portion of the costs allocable to the nonbusiness use can be counted toward the credit. This means the credit is calculated on a reduced cost base. The rule applies to both the residential clean energy credit and the energy efficient home improvement credit. If you use property primarily for business, you may not qualify for these residential credits at all, or you may receive a significantly smaller credit based on the nonbusiness portion of your use.
If less than 80% of the use of an item is for nonbusiness purposes, only that portion of the costs that is allocable to the nonbusiness use can be used to determine either credit.
2024 Instructions for Form 5695 (IRS)
A cost counts when installation is finished, not when you paid
For purposes of the residential clean energy credit, costs are treated as being paid when the original installation of the item is completed, or, in the case of costs connected with the reconstruction of your home, when your original use of the reconstructed home begins. This means that for the credit, the timing of when you actually pay for the property is not what matters. What matters is when the installation is finished or, for a reconstructed home, when you begin to use it. This rule ensures the credit is claimed in the tax year when the property becomes functional, not when you make a deposit or payment to a contractor.
For purposes of both credits, costs are treated as being paid when the original installation of the item is completed, or, in the case of costs connected with the reconstruction of your home, when your original use of the reconstructed home begins.
2024 Instructions for Form 5695 (IRS)
Utility rebates come off the cost first
If you receive a subsidy from a public utility for the purchase or installation of qualifying clean energy property, and that subsidy is not included in your gross income, you must reduce your cost by the amount of the subsidy before calculating the credit. This rule also applies if a third party, such as a contractor, receives the subsidy on your behalf. The purpose is to prevent double benefits: you cannot claim a credit on the portion of the cost that was effectively paid for by the utility. This reduction lowers the base used to calculate the 30% credit.
If you received a subsidy from a public utility for the purchase or installation of an energy conservation product and that subsidy wasn't included in your gross income, you must reduce your cost for the product by the amount of that subsidy before you figure your credit.
2024 Instructions for Form 5695 (IRS)
Fuel cells must be at your main home; solar need not be
Qualified fuel cell property must be installed on or in connection with your main home located in the United States to qualify for the credit. This is different from other clean energy property, such as solar panels, which can be installed on any home you own in the United States. The fuel cell credit is more restrictive, requiring the property to be at the home where you live most of the time. This means fuel cell systems installed at a vacation home or rental property do not qualify, while solar panels at those locations may still be eligible if all other requirements are met.
Qualified fuel cell property costs are costs for qualified fuel cell property installed on or in connection with your main home located in the United States.
2024 Instructions for Form 5695 (IRS)
How each figure was verified
Each number below was read from a stored copy of the document named beside it, and checked to occur word for word in the quoted sentence. The digest is of that stored text.
2024 Instructions for Form 5695 (IRS)
- Credit rate
You may be able to take a credit of 30% of your costs of qualified solar electric property, solar water heating property, small wind energy property, geothermal heat pump property, battery storage technology, and fuel cell property.
- Fuel cell credit limit, per half kilowatt
The credit amount for costs paid for qualified fuel cell property is limited to $500 for each one-half kilowatt of capacity of the property.