U.S. households claimed $6.3 billion in clean energy tax credits for 2023
The IRA extended and expanded tax credits that help households invest in residential clean energy such as solar panels, as well as home energy efficiency. New data from the Internal Revenue Service show that more than 3.4 million American families have already claimed more than $8 billion in residential clean energy and home energy efficiency credits against their 2023 federal income taxes, the first year that the IRA’s full adjustments to the value and scope of these tax credits were in effect. This report presents statistics on residential energy tax credit claims for tax year 2023. Investments in clean energy and energy efficiency benefit households by lowering and stabilizing their monthly utility bills, and all Americans by mitigating climate change and air pollution.
New data on household energy tax credit claims
Table 1 summarizes the new data on the residential clean energy and energy efficient home improvement tax credits for tax year 2023 tax returns filed and processed through May 23, 2024. More than 1.2 million American families have claimed over $6 billion in credits for residential clean energy investments — such as solar electricity generation, solar water heating and battery storage, among other technologies — averaging $5,000 per family. 2.3 million families have claimed more than $2 billion in credits for energy efficient home improvements — such as heat pumps, efficient air conditioners, insulation, windows and doors — averaging $880 per family.
These numbers are expected to grow as more income tax returns are filed and processed, including returns filed by taxpayers who requested an extension. But even these initial counts are significantly higher than in 2021, the last tax year before IRA was enacted. The number of families benefiting from these credits has increased almost one third and the aggregate value of the credits has increased by almost two thirds.
Solar electricity investments accounted for the largest number of residential clean energy credit claims. In total, more than 750,000 families reporting a total of more than $20.5 billion in qualified solar electric property costs in 2023. Families also reported investments in solar water heating, small wind turbines, geothermal heat pumps, batteries and fuel cells. For reported investments in energy efficient home improvements, more than 250,000 families claimed investments in electric or natural gas heat pumps, more than 100,000 families claimed investments in heat pump water heaters, and almost 700,000 families claimed investments in insulation and air sealing.
Families in all 50 states, the District of Columbia, and Puerto Rico claimed these credits. Nearly half of the families who claimed one or both credits had incomes in 2023 of less than $100,000.
Table 1: Residential energy tax credits claimed for tax year 2023
Number of returnsa
Credit valuea, b
Residential Clean Energy Credit
1,246,440
Total: $6.3 billion,
Average per return: $5,084
Selected examples
Rooftop solar
752,300
Up to 30% of cost
Batteries
48,840
Up to 30% of cost
Energy Efficient Home Improvement Credit
2,338,430
Total: $2.1 billion,
Average per return: $882
Selected examples
Home insulation
699,440
Up to 30% of costc
Windows and skylights
694,450
Up to 30% of cost or $600c
Central air conditioners
488,050
Up to 30% of cost or $600c
Heat pumps
267,780
Up to 30% of cost or $2,000
Heat pump water heaters
104,180
Up to 30% of cost or $2,000
a Rounded to the nearest ten. Preliminary numbers reflecting Tax Year 2023 returns filed and processed through May 23, 2024. Because of limits on the use of the credits such as those described in notes b and c, families may not report all qualifying investments or the full cost of those investments.b Credit value is limited by a family’s tax liability and other credits claimed. If a family cannot use all of the Residential Clean Energy Credit because of the tax liability limit, they can carry the unused portion of the credit forward to the next year. They cannot do so for the Energy Efficient Home Improvement Credit.c Energy efficiency tax credits other than those for heat pumps and for biomass stoves and boilers are subject to an aggregate annual cap of $1,200.5
News item from IRS, Research, Applied Analytics and Statistics Division.