Tax Credits That Put Real Money Back in Your Pocket
The federal tax credit picture for homeowners changed sharply in 2025, and not in your favor. Public Law 119-21, enacted July 4, 2025, terminated every residential energy credit years earlier than the Inflation Reduction Act had scheduled — the uncapped 30% solar credit, the capped efficiency credits for heat pumps and insulation and windows, and the home EV charger credit. As of today none of them can be claimed for new work. They were dollar-for-dollar credits that reduced your tax bill directly, not deductions buried in Schedule A, which is exactly why losing them changes the math on these projects so much. Here's what each one was worth, who can still claim one, and what's left.
Where Each Credit Now Stands
| Credit | What it was worth | Last qualifying work | Eligible Items |
|---|---|---|---|
| Residential Clean Energy (Solar ITC, §25D) | 30% of cost, no cap | Expired — expenditures made after Dec 31, 2025 | Solar panels, solar water heaters, battery storage |
| Energy Efficient Home Improvement (§25C) | 30% of cost, $3,200/year | Expired — property placed in service after Dec 31, 2025 | Heat pumps, insulation, windows, doors, electrical panel |
| Heat Pump & Heat Pump Water Heater (§25C) | 30% of cost, $2,000/year | Expired — property placed in service after Dec 31, 2025 | Air-source heat pumps, heat pump water heaters |
| Insulation & Air Sealing (§25C) | 30% of cost, $1,200/year | Expired — property placed in service after Dec 31, 2025 | Spray foam, blown-in, batts, air sealing materials |
| Windows & Skylights (§25C) | 30% of cost, $600/year | Expired — property placed in service after Dec 31, 2025 | ENERGY STAR Most Efficient certified |
| Exterior Doors (§25C) | 30% of cost, $500/year ($250/door) | Expired — property placed in service after Dec 31, 2025 | ENERGY STAR certified exterior doors |
| Electrical Panel Upgrade (§25C) | 30% of cost, $600/year | Expired — property placed in service after Dec 31, 2025 | 200-amp panel upgrade for electrification |
| EV Charger / EVSE (§30C) | 30% of cost, up to $1,000 | Expired — property placed in service after Jun 30, 2026 | Level 2 home charger + installation |
All four dates come from the same statute. See the IRS FAQs on Public Law 119-21 and Home Energy Tax Credits.
The Big One Is Gone: Solar Investment Tax Credit (§25D)
The solar ITC used to be the most valuable credit on this list — 30% of cost with no annual cap, or $7,500 on a typical $25,000 residential installation, batteries included. It is no longer available. Public Law 119-21, enacted July 4, 2025, terminated the Residential Clean Energy Credit for expenditures made after December 31, 2025.
The timing rule decides who's affected: an expenditure is treated as made when the original installation is completed. A system finished in 2026 gets no credit, even under a 2025 contract. See the IRS FAQs on Public Law 119-21 and Home Energy Tax Credits. Current pricing without any credit netted out is in our solar panel cost guide.
If Your System Was Completed in 2025 or Earlier
- File IRS Form 5695 (Residential Energy Credits) with the return for that year
- The system must have been installed and operational in the year you claim
- You must own (not lease) the system — PPA and lease arrangements never qualified for the homeowner credit
- Unused credit can carry forward to future tax years
For a deeper breakdown, read our solar tax credit guide for 2026.
Heat Pump Credits (through 2025 only): Up to $2,000/Year
A modern heat pump handles both heating and cooling at 2–3x the efficiency of traditional systems, and for a while federal policy paid you to install one. For property placed in service through December 31, 2025, §25C covered 30% of the cost up to $2,000/year for qualifying heat pumps and heat pump water heaters. On a typical $4,000–$8,000 air-source installation that was a $1,200–$2,000 credit.
For an installation placed in service in 2026, that credit is $0. The efficiency case for a heat pump hasn't changed, but the purchase price you should be comparing against a furnace is now the full installed price. State and utility rebates, where your area offers them, are what's left to bring it down.
Insulation Credits (through 2025 only): Including Spray Foam and Blown-In
Insulation isn't glamorous, but it's one of the highest-ROI energy improvements you can make — and it used to come with a credit. For property placed in service through December 31, 2025, §25C covered 30% of insulation costs up to $1,200/year, including spray foam, blown-in cellulose or fiberglass, batt insulation, and air sealing. On a $2,000–$6,000 whole-house upgrade that was a $600–$1,200 credit.
For 2026 work there is no federal credit, so the payback rests entirely on the energy savings — typically $200–$600/year, which still makes attic insulation one of the fastest-paying projects on this page even at full price. For more details, see our energy efficiency tax credits guide.
EV Charger Credit (§30C, through June 30, 2026): $1,000 Back
This one outlasted the others by six months, which is why you'll still find it quoted as current. The Alternative Fuel Vehicle Refueling Property Credit (§30C) covered 30% of a Level 2 home charger and its installation, up to $1,000 — and since a typical Level 2 charger plus installation runs $1,500–$3,000, most homeowners hit the cap. Public Law 119-21 terminated it for property placed in service after June 30, 2026. If your charger was up and running by that date you can still claim it on Form 8911 for that tax year; anything energized after it gets nothing.
What a 2026 Project Now Gets
The stacking arithmetic that used to make a whole-home electrification project pencil out no longer works. Here's the same shopping list, then and now:
- Install solar panels: $0 — §25D expired for expenditures made after Dec 31, 2025
- Install a heat pump: $0 — §25C expired for property placed in service after Dec 31, 2025
- Add insulation: $0 — same §25C termination
- Install an EV charger: $0 — §30C expired for property placed in service after Jun 30, 2026
- Total federal credits: $0
That same list came to $11,700 for work completed in 2025. Every dollar of it is gone, which is why a 2026 quote has to be judged on its gross installed cost and its energy savings alone. For home office-related deductions, check out our home office tax deduction guide.
The Bottom Line
All of the federal residential energy credits are finished: §25C and §25D for anything placed in service or completed after December 31, 2025, and the §30C EV charger credit after June 30, 2026. If your work fell inside those windows and you haven't filed for that year yet, claim it — Form 5695 for §25C and §25D, Form 8911 for the charger — and keep every receipt and manufacturer certification. For anything you're planning now, budget the full price, check your state energy office and your utility for programs that still run, and treat any contractor still quoting "30% back from the IRS" as working from an out-of-date script. A tax professional is worth a call if you have a 2025 project you haven't claimed.