Home Energy Tax Credits Ended in 2025: What It Means Now

The IRS pages for both credits now give December 31, 2025 as the end of eligibility.

The Energy Efficient Home Improvement Credit covered 30% of qualifying costs for improvements such as insulation, exterior windows and doors, heat pumps, heat pump water heaters, and home energy audits, for property placed in service from January 1, 2023 through December 31, 2025. ENERGY STAR summarizes it the same way: the credits were available through the end of 2025.

The Residential Clean Energy Credit covered 30% of the cost of solar, wind, geothermal, fuel cell, and battery storage property. The IRS states that it is not available for any property placed in service after December 31, 2025.

For a project installed in 2026, neither federal credit applies. Any article or quote that still promises one for 2026 work is out of date.

The year that counts is the year the work was installed.

For both credits, the IRS says you must claim the credit for the tax year when the property is installed, not merely purchased. A system ordered and paid for in December 2025 but installed in January 2026 falls on the wrong side of the line.

If a date is borderline, get the installation completion date in writing from the contractor and check it with a tax professional before filing. The calculator on this site can model the energy savings of a project; it cannot decide eligibility.

Both credits are claimed on Form 5695 with the return for the year of installation.

The efficiency credit goes on Form 5695, Part II. Its limits were per year: up to $1,200 for most improvements, with caps of $250 per exterior door and $500 for all doors, $600 for windows and skylights, and $150 for a home energy audit, plus a separate $2,000 a year for qualifying heat pumps, heat pump water heaters, and biomass stoves or boilers — $3,200 in total.

For property placed in service in 2025, the IRS adds a condition: no credit is allowed unless the item was made by a qualified manufacturer and its Qualified Manufacturer Identification Number (QMID) is reported on the return. Keep the product documentation that carries it.

Both credits are nonrefundable. The difference is what happens to the excess: the efficiency credit cannot be carried to a later year, while the clean energy credit for solar and batteries can be carried forward against future tax.

Without the federal share, a project has to justify itself on energy savings and local incentives.

A heat pump or insulation project that looked attractive at 70% of the price now has to be judged at the full price. Start from what the project actually saves: your own electricity rate, your own bills, and the equipment’s rated consumption. The appliance energy cost calculator and the guide to reading an electric bill give you those numbers.

Then look for money that did not come from the federal tax code. ENERGY STAR notes that many local utilities offer rebates for professional home energy assessments and for air sealing and insulation, and points to the DSIRE database for state incentives. The ENERGY STAR rebate finder searches by zip code.

Five questions that keep an outdated promise out of the contract.

1. Does the quote mention a federal tax credit? For 2026 installation, ask the contractor to remove it from the pricing.
2. What local utility or state rebates apply, and who files for them?
3. What is the installation completion date, in writing?
4. What does the equipment save per year at your electricity or fuel price?
5. What is the payback at full price, without any credit?