Federal and State Tax Programs Sweeten the Deal on Home Energy Improvements

Originally published: February 29, 2024

Updated: February 29, 2025

Tax Day is April 15, and whether you have already filed or are still pulling receipts together, it’s nice to know what tax breaks could help you save - both dollars and the planet. 

The 2022 Inflation Reduction Act allocates $370 billion towards supporting consumers and industry partners in advancing - and paying for - climate action initiatives. More than $8 billion of those funds are intended to go towards funding home energy credits. In 2024, 2.3 million families received more than $2 billion in energy efficiency tax credits, averaging $880 per family.

The State of Colorado offers additional tax incentives to Coloradans, including clean energy tax credits for electric vehicles, e-bikes, industrial improvements, and electric lawn and garden equipment.

So, how do you get a piece of the pie while decreasing your carbon footprint? Let’s dig in. 

For those who own homes. 

When it comes to energy saving in the home, federal and state tax incentives predominantly apply to those who own the property. Many of the rebates offer up to 30% of the original cost of the equipment, including things like:

• Heat pumps
• Solar
• Battery storage
• Air conditioners
• Insulation
• Exterior windows and doors

Looking for more ways to save? Local utility providers like Black Hills Energy and Holy Cross Energy offer energy efficiency rebate programs. Additionally, you may qualify for CORE’s rebates and incentives for residential and commercial projects. 

What if I don’t own property? 

If you don’t own your home, you won’t be eligible for many of the property improvement rebates. But do not fret! There are still a lot of ways you can save energy in your home, resulting in dollars saved.

To start your energy-saving journey, take a hard look at your lighting sources. Since lighting accounts for 11% of energy use in the typical home, reduce your light energy by switching to LEDs. They provide a higher quality of light, use 75% less energy, and have a longer lifespan. While incandescent bulbs last for 1,000 hours and compact fluorescent lamps (CFLs) for 10,000 hours, LEDs last up to 25,000 hours or more. Make sure you recycle CFLs, which contain mercury, at the Pitkin County Landfill. 

You can also install lighting controls, such as timers, occupancy sensors, and daylighting controls that are designed to only put light out when and where you need it most. 

A few other ideas for reducing energy usage in the home include: 

• Wash your clothes in cold water.
• Take a bite out of vampire loads and plug electronics into an advanced power strip. 
• Grab a sweater and turn down the heat. 
• Using wool dryer balls can reduce dry time by providing clothes with more air, reducing static, and absorbing moisture.

Want to learn more?  Schedule a home energy assessment through CORE or your utility company, and then submit for up to $150 in a federal rebate to cover some of the cost. 

Energy reduction savings for federal and state tax incentives span beyond properties to mobility, as well. Explore other credits and rebates available for purchases of electric vehicles, bikes, and mowers - to name a few. 

If you have questions about navigating the deep hole of tax rebates, check out our website or schedule an appointment with our Energy Concierge team. A qualified tax specialist can also help you find and navigate federal and state tax forms and additional resources. 

Future Savings

If you didn’t pull the plug on doing energy upgrades last year, you can still benefit from tax savings. More funding is available and will continue to be released this year and years to follow. Follow CORE, the Colorado Energy Office, and the US Department of Energy for more information.