Green Rewards from Uncle Sam

Quick Reference:

Tax Incentives for Water Heaters (non-solar)

Item	Tax Credit	Tax Credit Requirements
Water Heaters – Gas, Oil, Propane	30% of cost, up to $1,500*	Energy Factor ≥ 0.82 or a thermal efficiency of at least 90%.
Electric Heat Pump Water Heater	30% of cost, up to $1,500*	Same criteria as Energy Star: EnerFactor ≥ 2.0 .

*subject to $1,500 maximum for all improvements combined

Notes

All Energy Star gas tankless water heaters will qualify. See the list of qualifying whole-home gas tankless water heaters.

There are currently no Energy Star qualified gas storage tank or gas condensing water heaters that qualify.

Heat Pump Water Heaters: A maximum current rating of 24 amperes, voltage no greater than 250 volts, and a transfer of thermal energy from one temperature to a higher temperature level for the purpose of heating water. Unit must have "integrated" or "drop-in" configuration.

Whole-Home Gas Tankless Water Heaters: A nominal input of over 50,000 BTU/hour up to 200,000 BTU/hour and a rated storage volume of 2 gallons or less.