Home performance and clean energy improvements like heat pumps, solar panels, and battery storage reduce fossil fuel consumption and save homeowners money.
Federal tax credits help homeowners pay for these upgrades, but that could be changing very soon.
Congress is considering a new bill that would repeal the Energy Efficient Home Improvement Tax Credit and the Solar Tax Credit at the end of this year.
If the bill is signed into law, the ripple effects will increase energy costs, put jobs at risk, and stall clean energy adoption in the US.
Here’s what you need to know.
What Tax Credits Are at Risk?
1. The 30% Solar Tax Credit (25D)
The solar tax credit allows you to recover nearly a third of your installation costs as soon as you file your taxes for the year you install your solar panels and/or battery storage system. Without it, solar and storage will get a lot more expensive.
2. The Energy Efficient Home Improvement Tax Credit (25C)
With the Energy Efficient Home Improvement Tax Credit, you can claim up to $2,000 per year on heat pumps and heat pump water heaters, and up to $1,200 a year on insulation, air sealing, replacement windows, and other energy-saving home improvements.
What’s Changing in 2025?
Congress is considering a new reconciliation bill that would repeal both the solar tax credit and the Energy Efficient Home Improvement Tax Credit at the end of 2025.
The bill passed the House of Representatives by a single vote in May and is now headed to the Senate. If it passes the Senate and is signed into law, the Solar Tax Credit and the Energy Efficient Home Improvement Tax Credit will disappear at the end of 2025.
That means:
- Solar panels, battery storage, and heat pumps will get significantly more expensive.
- Clean energy adoption throughout the United States will drop, and fossil fuel usage will increase.
- Hundreds of thousands of clean energy jobs will be at risk.
What Can You Do?
The good news is that it’s not too late. Congress still has time to change course and protect tax credits that save American families and businesses money, reduce fossil fuel consumption, and create jobs.
Contact Your Representatives
At the Clean Energy Connection, we’re doing everything we can to protect clean energy tax credits, and we encourage you to do the same. Contact your representatives and urge them to stand up for clean energy tax credits.
Claim Savings While You Still Can
There’s still time to take advantage of clean energy tax credits! If you’ve been thinking about installing a heat pump, upgrading your insulation, or going solar, now is the time.
Projects like these take time, and to claim the credit, your installation needs to be completed by the last day of the year. If you wait too long, you could miss out on thousands of dollars in savings.
Need a contractor? Start your search with the Clean Energy Connection. We connect California homeowners with the best clean energy contractors for heat pumps, solar panels, battery storage, and much more. It’s the easiest way to find a contractor you can trust.