Rebates & Tax Credits for Energy Efficiency
Energy-efficient upgrades don’t just help you save on utility bills—they also qualify you for valuable rebates and federal tax credits. Through December 31, 2025, homeowners can take advantage of incentives that make upgrading your home’s efficiency and clean energy systems more affordable than ever.
Homeowners Can Save Up to $3,200 on Taxes
Federal income tax credits are available to cover up to 30% of the cost of qualified home upgrades, with a maximum of $3,200 per year. These credits can be used toward a wide range of improvements, from new HVAC systems to better insulation, windows, and more.
In addition, the Residential Clean Energy Credit offers a 30% tax credit for clean energy equipment such as rooftop solar, geothermal heat pumps, battery storage, and wind energy systems. Both credits run through the end of 2025.
Energy Efficient Home Improvement Tax Credits
Save money while making your home more comfortable and sustainable. Eligible upgrades include:
- Up to $2,000 for heat pump technology, including:
- Air source heat pumps
- Heat pump water heaters
- Biomass stoves or boilers
- Air source heat pumps
- Up to $1,200 for other energy-efficient improvements, such as:
- Windows, doors, and skylights
- Insulation and air sealing
- Furnaces, boilers, and central air conditioners
- Water heaters (natural gas, oil, propane)
- Electric panel upgrades
- Home energy audits
- EV chargers
- Windows, doors, and skylights
Residential Clean Energy Credits
Homeowners can also claim 30% of the cost of qualifying renewable energy equipment. This includes:
- Geothermal heat pumps
- Solar energy systems
- Small wind turbines
- Fuel cells
- Battery storage technology
Unlike the Home Improvement Credit, some of these credits can be carried forward, allowing you to apply unused portions to future tax years.
How to Claim Federal Tax Credits
Tax credits are managed by the IRS and can be claimed with your federal tax return for the year the improvements are made.
- File IRS Form 5695 when you submit your taxes.
- Starting in 2025, include the Qualified Manufacturer (QM) code for eligible products, which verifies your upgrade qualifies for the credit.
Eligibility requirements depend on the type of improvement:
- Home improvements (like windows, doors, insulation) must be for your principal residence in the U.S.
- HVAC and heating systems (such as heat pumps, boilers, furnaces) may apply to a primary or secondary home, including rentals.
- Energy audits must be for your principal residence.
Strategies to Maximize Your Savings
To get the most out of these incentives, consider planning your upgrades over multiple years to claim the maximum credits. For example:
- Combine a home energy audit with insulation upgrades for up to $1,200 in credits in a single year.
- Replace your heating and cooling system with an energy-efficient heat pump to claim an additional $2,000 in the same year.
- Upgrade windows, exterior doors, and a heat pump water heater together to claim over $3,000 in one taxable year.
With careful planning, you can reach the full annual credit limit of $3,200 each year through 2025.