Are you thinking about making energy efficiency improvements to your home? Now is a great time to get started with electrification, home performance, or zero net energy upgrades. Most home energy efficiency and clean energy upgrades, from insulation to solar panels, are currently eligible for tax credits and incentives—but these savings won’t be available forever.
The Clean Energy Connection is here to help you take full advantage of home energy rebates and incentives so you can upgrade your home for less. Keep reading for our complete list of the best energy efficiency rebates and incentives for 2025.
Federal Incentives
The Inflation Reduction Act (IRA) created a slew of incentives when it was signed into law in 2022. These are federal incentives available to all United States households.
Tax Credits
The federal government offers tax credits for a variety of energy efficiency home improvements and renewable energy systems. A tax credit is a reduction in the amount of taxes you owe. A federal tax credit reduces what you owe when you file your federal income taxes for the year you receive your credit. If you receive a $1,000 tax credit, for example, and you owe $1,000 in taxes, the credit will cancel out your balance.
There are two federal tax credits available for energy efficiency and clean energy improvements.
Solar Tax Credit / Investment Tax Credit (ITC)
Installing a home solar system is one of the best ways to reduce your carbon footprint and save money on your energy bills. The solar panel tax credit (also known as the Investment Tax Credit) was introduced to make solar installations more affordable for homeowners.
The solar tax credit in 2025 is worth 30% of your total solar installation costs—if you spend $15,000 on your solar installation, you can reduce your federal tax liability by $4,500. It covers all types of solar installations, including rooftop solar, off-grid solar, ground-mounted solar panels, and solar battery storage systems like the Tesla Powerwall and FranklinWH.
The Energy Efficient Home Improvement Tax Credit (25C)
With the Energy Efficient Home Improvement Tax Credit, you can claim up to $3,200 per year when you make qualifying home improvements. You can claim the credit for eligible improvements made through 2032.
The energy efficiency tax credit is broken down into two categories:
- Up to $1,200 for building envelope components (including insulation, air sealing, and exterior windows and doors), energy audits, and qualifying energy efficient HVAC systems (including boilers, furnaces, and central air conditioning).
- Up to $2,000 for heat pump HVAC systems (including ducted and ductless heat pumps) and heat pump water heaters.
Upgrades like these save energy, which reduces fossil fuel consumption and saves you money. Making energy efficient home improvements can also help you prepare for a home solar installation—the less energy you use, the fewer solar panels your home will need.
Check out our Guide to the Energy Efficient Home Improvement Tax Credit to learn more.
California-Specific Incentives
California is a leader in both energy efficiency and solar energy. This is due, in part, to the excellent rebates and incentives the state has historically offered. Though there have been significant changes to incentives like net metering in California in recent years, there are still incentive opportunities available for a variety of home upgrades.
TECH Clean California Rebates
TECH Clean California is a statewide initiative to accelerate the adoption of clean space and water heating technology throughout the state.
TECH Clean California Water Heater Rebates
TECH Clean California is currently offering heat pump HVAC system rebates to single-family households who enroll in an electric utility demand response program.
*Offers are subject to change or cancellation. Visit TECH Clean California for up-to-date rebate & incentive amounts.
HEERA Rebates for Income-Qualified Households
A new home energy efficiency rebate program, HEERA (High-Efficiency Electric Home Rebate Act) is now available in California! This home energy rebate program is managed by TECH Clean California and will provide income-eligible households with up to $8,000 in rebates to upgrade to zero-emission electric appliances like heat pumps. Single-family household incomes between 80% and 150% of the area median income are eligible for rebates of up to $4,000. Single-family households with incomes less than 80% of the area median income are eligible for rebates of up to $8,000.
California Utility Energy Rebate Programs
Many California utility companies, including SMUD, PG&E, and SCE, offer rebates and incentives for certain energy efficiency upgrades. Depending on your utility, you could qualify for heat pump rebates, energy efficient appliance rebates, thermostat rebates, heating and cooling rebates, solar battery rebates, and more.
How to Qualify for California Energy Efficiency Rebates
Qualification requirements vary depending on the type of rebate you are applying for. In many cases, you’ll have to work with a participating contractor who will help you apply for and claim your rebate.
Use The Clean Energy Connection To Find A Contractor
The Clean Energy Connection makes it easy to find a qualifying clean energy contractor that can help you maximize your incentives. The free directory connects homeowners with vetted, experienced, and highly rated clean energy contractors in California. It’s easy to use and can be filtered by location, services, incentives, and more. Just visit the directory and refine your search based on the services and rebates or incentives you’re interested in. You’ll be directed to a list of local contractors that can help you qualify. It’s that simple!
Save on home upgrades with California energy rebates in 2025.