Energy Efficiency and Clean Energy Tax Credits Boom: $8.4 Billion Claimed in 2023, with $2.1 Billion in Energy Efficiency Credits and $6.34 Billion in Clean Energy Credits!

U.S. Households Claim $8.4 Billion in Tax Credits for Energy Efficiency and Clean Energy

Inflation Reduction Act Boosts Tax Credit Use, With Significant Increases in Claims and Savings

According to UTILITY DIVE, in a major boost for energy efficiency and clean energy U.S. households claimed $8.4 billion in tax credits for 2023 according to the Treasury Department. This total includes $2.1 billion in energy efficiency credits with an average credit of $882 per household. These credits have been used for various upgrades such as energy audits heat pumps and insulation. The Treasury Department expects this amount to increase as more tax returns are processed and additional claims are filed.

Additionally about 1.25 million households received $6.34 billion in clean energy tax credits averaging $5,084 per household. These credits were used for projects like installing rooftop solar panels and battery storage systems. This data offers an early view of how the Inflation Reduction Act which expanded these credits in 2022 is impacting tax credit use. Compared to the previous year the number of families benefiting from these credits has increased by nearly one-third and the total claimed value has grown by almost two-thirds.

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Energy Efficiency and Clean Energy Tax Credits Boom: $8.4 Billion Claimed in 2023, with $2.1 Billion in Energy Efficiency Credits and $6.34 Billion in Clean Energy Credits! (PHOTO: LinkedIn)

The Treasury Department expects more claims to come in as additional tax returns are processed. Common claims include insulation, windows and central air conditioners. The states with the most claimed dollars for efficiency projects are California, New York, Florida, Texas, and Pennsylvania. These upgrades can save households between $600 and $3,100 annually on energy costs depending on the improvements.

Furthermore the Treasury Department’s data highlights a significant rise in the uptake of energy efficiency and clean energy tax credits reflecting the impact of the Inflation Reduction Act’s expanded provisions. As more tax returns are processed especially those filed under extension the total amount claimed is expected to increase. Households that have invested in energy-saving upgrades such as insulation and new windows are seeing substantial savings on their energy bills. States like California, New York, Florida, Texas, and Pennsylvania lead in claiming these credits demonstrating a strong commitment to reducing energy consumption and costs.

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