5 green home upgrades that also buy you a tax break

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Energy-efficient products might cost more than other models, but they essentially pay for themselves in reduced home energy costs, according to the U.S. Environmental Protection Agency.

Federal income tax credits can add to homeowners' savings. Credits for five types of alternative-energy systems, like solar water heaters, are available through the new year.

That means taxpayers who purchase one of these systems this year or next year can apply the credit to their 2015 or 2016 personal income tax bill from the Internal Revenue Service. This Residential Renewable Energy Tax Credit, as it's technically known, expires Dec. 31, 2016.

As Money Talks News founder Stacy Johnson explains, a tax credit is even better than a tax deduction. "A deduction just lowers your taxable income, but a credit? That lowers your tax bill. It's like money in the bank."

The Residential Renewable Energy Tax Credit is worth up to 30 percent of expenses for an alternative-energy system, including installation and labor costs.

To be eligible for the credit, taxpayers must purchase the system for their home, which must be located in the U.S. and owned by the taxpayer. (So rental properties do not qualify for this tax credit.) They must also file a Form 5695 with their tax return.

Click ahead for a look at 5 home upgrades that are good for the environment and your wallet.

Solar electric

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System type: Solar panels, also known as photovoltaic systems (which capture light energy from the sun and convert it directly into electricity).
System requirements: Must provide electricity for the home, rather than for swimming pools or hot tubs, and must meet applicable fire and electrical code requirements.
Qualifying property types: Primary home or second home.
Maximum expense amount that can be claimed: No upper limit.

Solar water heating

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System type: Solar water heaters (which use the sun's thermal energy to heat water).
System requirements: Must heat water for the home, rather than for swimming pools or hot tubs, and must meet applicable fire and electrical code requirements. Must be certified by the Solar Rating and Certification Corporation or a comparable entity endorsed by the applicable state government.
Qualifying property types: Primary home or second home that generates at least half of its energy from the sun.
Maximum expense amount that can be claimed: No upper limit.

Small wind energy

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System type: Small wind turbines.
System requirements: Must have a nameplate capacity of no more than 100 kilowatts.
Qualifying property types: Primary home or second home.
Maximum expense amount that can be claimed: No upper limit.

Geothermal heat pump

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System type: Geothermal heat pumps (which use the earth's natural heat instead of outside air to provide heating, air conditioning and often hot water).
System requirements: Must meet federal Energy Star criteria that are in effect at the time the system is purchased.
Qualifying property types: Primary home or second home.
Maximum expense amount that can be claimed: No upper limit.

Fuel cell

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System type: Fuel cells, microturbines.
System requirements: Must have an efficiency of at least 30 percent and a capacity of at least 0.5 kW.
Qualifying property types: Primary home only.
Maximum expense amount that can be claimed: Up to $500 per 0.5 kW of power capacity.