On this page
What changed
The 2025 budget reconciliation law (Public Law 119-21, signed July 4, 2025) ended two popular federal credits early:
- 25C Energy Efficient Home Improvement Credit (insulation, windows, heat pumps, and more): not allowed for property placed in service after December 31, 2025
- 25D Residential Clean Energy Credit (solar, battery storage, geothermal): not allowed for expenditures made after December 31, 2025
For the 25D credit, paying a deposit in 2025 is not enough if installation finishes in 2026: IRS treats the expenditure as made when original installation is completed. Special timing applies to a newly constructed or reconstructed home. Check the IRS guidance before claiming a credit. Be skeptical of contractors advertising these credits for new 2026 projects.
Help that still exists
| Program | Who | Notes |
|---|---|---|
| Weatherization Assistance Program | Income-eligible (generally ≤200% of poverty) | Free upgrades after an energy audit. See weatherization |
| HEAR (Home Electrification and Appliance Rebates) | Low- and moderate-income households (≤150% of AMI) in participating states | Point-of-sale rebates for heat pumps, electric panels, wiring, insulation, and more |
| HOMES (Home Efficiency Rebates) | Homeowners and landlords in participating states | Rebates based on modeled or measured energy savings |
| Utility rebates and programs | Utility customers | Often include free income-qualified upgrades |
| State and local incentives | Varies | Some states fund their own programs |
| LIHEAP | Income-eligible | Some states use LIHEAP for heating repairs or weatherization |
Prioritize upgrades
- Get an energy assessment (free through many utilities or weatherization agencies).
- Fix safety issues: combustion safety, carbon monoxide, electrical hazards.
- Seal and insulate: air sealing, attic insulation, duct sealing.
- Right-size equipment: replace failing heating/cooling equipment with efficient models when it makes sense.
- Water heating and appliances.
- Renewables after reducing demand.
Financing and costs
- Compare installed cost, expected bill savings, maintenance, and equipment lifespan.
- Get multiple bids and confirm rebate eligibility before signing.
- Be cautious with high-cost financing and PACE liens. See home improvement financing.
Renters
Renters can ask landlords to participate in utility or rebate programs, use weatherization with landlord permission, and use low-cost measures like weatherstripping, LED lighting, and efficient window treatments.
Low-cost steps with fast payback
Before investing in big equipment, try:
- LED lighting throughout the home
- Weatherstripping and door sweeps
- Sealing gaps around pipes, outlets on exterior walls, and attic hatches
- Programmable or smart thermostat (used correctly)
- Water heater temperature around 120°F and pipe insulation
- Low-flow showerheads and faucet aerators
- Cleaning or replacing HVAC filters regularly
Heat pumps: what to know
Modern heat pumps can heat and cool efficiently in many climates, including cold climates with cold-climate models. Before installing:
- Get a load calculation (Manual J) so the system is sized correctly.
- Check whether your electrical panel can handle the load; HEAR rebates may help with panel upgrades where available.
- Ask about air sealing and insulation first to reduce the size and cost of equipment.
- Compare operating costs with your current fuel using local utility rates.
If your project was finished in 2025
If you completed qualifying improvements (25C) or installed qualifying systems (25D) by December 31, 2025, you may be able to claim the credit on your 2025 federal tax return. Keep invoices and manufacturer certifications. Consult IRS guidance or a tax professional.
Scams and high-pressure sales
Be wary of:
- Door-to-door solar or HVAC sales promising “free” systems or “government programs”
- Contracts with escalating payments or long-term leases you don’t fully understand
- Claims that expired federal tax credits still apply
- Financing arranged by the salesperson without independent review
Verify rebate programs through your state energy office or DOE’s rebate page, and get multiple bids.
Frequently asked questions
Can I still get the federal tax credit for a heat pump or solar panels?
Not for work completed in 2026. Under the 2025 law (Public Law 119-21), the 25C credit doesn’t apply to property placed in service after December 31, 2025, and the 25D credit doesn’t apply to expenditures made after that date. If your project was completed by December 31, 2025, you may claim it on your 2025 return.
Are the IRA home energy rebates still available?
In some states. The Home Energy Rebate programs (HEAR for electrification and HOMES for whole-home efficiency) are run by states, availability, eligible equipment, contractor requirements, and remaining funds vary. Use DOE’s program directory and confirm with your state energy office before buying equipment.
What upgrades save the most?
It depends on the home, but air sealing, attic insulation, duct sealing, and fixing inefficient or unsafe heating equipment often provide the best return. An energy assessment helps you prioritize.
Sources and verification
Use these sources to check program rules. Funding, openings, and local procedures must be confirmed with the agency handling your application.
Update note (2026-10-01): Clarified IRS installation timing for the expired residential clean energy credit and directed rebate availability checks to state administrators.
- FAQs for modification of sections 25C, 25D, and other credits under Public Law 119-21Internal Revenue Service
- Home Energy RebatesU.S. Department of Energy
- Weatherization Assistance ProgramU.S. Department of Energy
- Energy Saver: home upgradesU.S. Department of Energy
Found a changed rule or a broken link? Report a correction for this guide.