Do the federal and state alternative energy systems credits apply to a second home or rental unit?
The federal alternative energy credits (for geothermal heat pumps, solar hot water heaters, solar panels, small wind energy systems, fuel cells, etc.) are not limited to principal residences. Taxpayers installing alternative energy systems in second homes or rentals may qualify for the federal credits. Montana’s alternative energy generation and geothermal systems credits cannot be claimed for systems installed in second homes or rentals. With one exception, the qualifying property must be installed by a Montana resident in their principal residence. The exception is the installation of a geothermal system as part of new construction – the contractor may claim the geothermal credit for a residence constructed for sale.
