Federal Home Energy Tax Credits in 2026

Last reviewed: 2026-06-30 (UTC)

Short answer: yes, the two big federal home energy tax credits ended for new 2026 projects. The One Big Beautiful Bill Act (OBBBA), signed July 4, 2025, terminated both the Energy Efficient Home Improvement Credit (25C) and the Residential Clean Energy Credit (25D) for property and expenditures dated after Dec. 31, 2025. If you are starting a heat pump, solar, battery, window, insulation, or panel project in 2026, there is no federal 25C or 25D credit for it.

That sounds like bad news, and for the federal credits it is. But it is not the whole story, and it is worth slowing down on two points:

If your project was placed in service in 2025, you can still claim it. The credits did not vanish retroactively. A qualifying 2025 install goes on your 2025 federal return under the normal rules.
State rebates, utility rebates, and (where active) the IRA Home Energy Rebate programs are separate. They were not part of OBBBA's termination. Depending on where you live, you may still have real money on the table in 2026.

This page explains exactly what changed, what you can still do, and where to go next. It is informational, not tax advice — use current IRS guidance and a tax professional for filing decisions.

What changed: the two federal credits at a glance

Credit	What it was	When it ends	Can 2025 installs still claim it?
25C — Energy Efficient Home Improvement Credit	30% of cost for heat pumps, heat pump water heaters, insulation, air sealing, windows, doors, certain HVAC, panel-related enabling work, and home energy audits. Up to $1,200/yr for many categories plus a separate $2,000/yr bucket for qualifying heat pumps, heat pump water heaters, and biomass.	Terminated for property placed in service after Dec. 31, 2025.	Yes — qualifying property placed in service in 2025 is claimable on the 2025 return (Form 5695, Part II). 25C is nonrefundable and does not carry forward.
25D — Residential Clean Energy Credit	30% of cost for solar, battery storage, geothermal, solar water heating, small wind, and fuel cells.	Terminated for expenditures made after Dec. 31, 2025. An expenditure is treated as made when the original installation is completed, so the install must be finished by Dec. 31, 2025.	Yes — expenditures for property whose installation was completed in 2025 are claimable on the 2025 return (Form 5695, Part I). Unused 25D credit can carry forward to future years.

The key date for both is the same: Dec. 31, 2025. The difference is the trigger.

For 25C it is when the property is placed in service. For 25D it is when the expenditure is made, which the IRS treats as the date the original installation is completed.

What this does not mean

It is easy to over-read "the credits are gone." A few honest clarifications:

It does not erase 2025 installs. If you completed a qualifying project in 2025, file for it. You have not missed your window just because the calendar turned to 2026.
It does not touch state, local, or utility rebates. Those programs have their own funding and rules and were not part of OBBBA.
It does not necessarily end every clean-energy path for renters or people who lease equipment. For example, third-party-owned solar (a lease or power purchase agreement) is financed by a company that may still claim the commercial clean-energy credit and pass some value through in pricing — that is a business credit, not your personal 25D credit, and the savings depend on the deal.

Why this happened

OBBBA (Public Law 119-21, signed July 4, 2025) accelerated the termination of several energy provisions, including the two residential credits homeowners care about most.

The credits had been scheduled to run for years longer under the prior law; OBBBA pulled the end date forward to Dec. 31, 2025.

There is no federal restoration of the residential credits moving through Congress as of this review. Some proposals address commercial clean-energy credits, but those are not the homeowner 25C/25D credits. So for planning purposes in 2026, treat the federal residential credits as closed.

What you can still do in 2026

Here is the reassuring part: the federal credits were never the only money. For a lot of homeowners, state and utility programs are larger and easier to capture than the federal credit ever was. With the federal credits gone, these become the main event.

1) State and utility rebates

Most of the meaningful savings in 2026 come from state energy offices and your electric or gas utility. These vary a lot by location, but common examples include:

Heat pump rebates that can run into the thousands of dollars, sometimes higher for income-qualified households.
Heat pump water heater, weatherization, and insulation rebates.
Low- or zero-interest financing (for example, on-bill or state "HEAT loan"–style programs).

Start with the location-specific pages:

Heat Pump Rebates by State — find what your state offers.
Mass Save Heat Pump Rebate — Massachusetts utility program with rebates up to several thousand dollars plus 0% financing.
Maine Heat Pump Rebate — Efficiency Maine's tiered rebates.
Energize CT Heat Pump Rebate — Connecticut's Eversource/UI program, from $250/ton up to $10,000 combined.
NYSERDA Heat Pump Rebate — New York's NYS Clean Heat program, delivered utility-by-utility with amounts up to $10,000-$18,000.

2) IRA Home Energy Rebates (HOMES and HEAR), where active

Separate from the tax credits, the Inflation Reduction Act Home Energy Rebate programs — HOMES (whole-home efficiency) and HEAR (electrification, also called HEEHRA) — are run through the states. Federal guidance in 2026 restarted these with some changes, and not every state is open, fully funded, or covers every household type.

Two honest caveats:

Availability is uneven. Some states have launched, some are still standing up their programs, and some funding tiers are reserved or waitlisted. Check your state's program before you count on it.
Eligibility rules changed and some details are still settling. Income limits apply to much of the funding, and program scope has narrowed in places. Confirm the current rules with your state energy office rather than assuming a given upgrade qualifies.

For the HEAR/HEEHRA side, start with our HEEHRA Rebates guide, then verify against your state's official program page.

3) Compare the pieces before you sign

Because rebates, financing, and the (now-closed) federal credit all work differently, it is easy to double-count savings in a contractor quote. Before you commit:

Still filing for a 2025 install? Start here

If you completed a qualifying project in 2025, the credit is still yours to claim on your 2025 return. The mechanics:

25C (heat pump, windows, insulation, panel work, etc.): claimed on Form 5695, Part II. Nonrefundable, no carryforward — it can only offset tax you owe for that year.
25D (solar, batteries, geothermal): claimed on Form 5695, Part I. Any amount you cannot use this year carries forward to reduce future tax.

For the details and category-specific rules, use:

FAQ

Did the federal home energy tax credits really end in 2026?

For new projects, yes. OBBBA terminated both the 25C Energy Efficient Home Improvement Credit and the 25D Residential Clean Energy Credit for property placed in service (25C) or expenditures made (25D) after Dec. 31, 2025. There is no federal residential credit for a 2026 install.

I installed a heat pump (or solar) in 2025 but haven't filed yet. Did I lose the credit?

No. The termination applies going forward. A qualifying 2025 install is still claimable on your 2025 federal return using Form 5695. See our Form 5695 Instructions.

What's the difference between the 25C and 25D end dates?

Both end Dec. 31, 2025, but the trigger differs. 25C is based on when the property is placed in service. 25D is based on when the expenditure is made, which the IRS treats as the date the original installation is completed.

Can I carry forward an unused credit?

For 25D (solar, batteries, geothermal), yes — unused credit carries forward to future tax years. For 25C, no — it is nonrefundable and does not carry forward.

Are state and utility rebates gone too?

No. State, local, and utility rebates are separate programs that were not affected by OBBBA. Many are active in 2026 — start with Heat Pump Rebates by State.

Is there any federal clean-energy money left for homeowners?

Not as a personal residential tax credit. The one indirect path is third-party-owned solar (lease or PPA), where the financing company may claim a commercial clean-energy credit and reflect some of that value in your pricing. That is a business credit, not your 25D credit, so read the contract carefully.

Will the credits come back?

There is no federal legislation restoring the residential 25C/25D credits as of this review. Treat them as closed for 2026 planning, and lean on state, utility, and IRA rebate programs instead.

Are Federal Home Energy Tax Credits Gone in 2026? What OBBBA Changed