Why can't I get the Energy Efficient Home Improvement Credit anymore?

Under the provisions of H.R. 1 (2025), the Energy Efficient Home Improvement Credit was officially terminated (Section 70505). This means that if you installed energy-efficient upgrades after the legislation was enacted, you can no longer claim this federal tax credit.

Can the Energy Efficient Home Improvement Credit be carried forward?

No. Even before it was repealed, this credit was non-refundable and could not be carried forward to future tax years. That remains the case, and the program itself is now discontinued.

What tax year was the Energy Efficient Home Improvement Credit last valid?

The credit previously applied to qualifying energy-efficient home improvements installed before the enactment of H.R. 1 in 2025. If your upgrades were installed prior to that law taking effect, you may still be eligible to claim the credit on your 2024 tax return. For improvements made after the enactment, the credit is no longer available.

Is the 30% solar tax credit going away?

Yes. H.R. 1 (2025) terminated the Residential Clean Energy Credit (Section 70506), which had allowed homeowners to claim 30% of the cost of solar panel systems and other clean energy installations. This credit is no longer available for systems installed after the law was enacted in 2025.

Are any clean energy tax credits still available?

At the federal level, key clean energy tax credits, including the Energy Efficient Home Improvement Credit and Residential Clean Energy Credit, have been terminated by H.R. 1 (2025). However, you may still be eligible for clean energy incentives at the state, local or utility level. Check with your state energy office or local utility provider for available programs.

The phase-out of energy tax credits: What you need to know

Making energy-efficient home improvements can be a smart way to reduce energy use and save money. However, recent legislation has changed the eligibility for federal tax benefits when it comes to these home improvement upgrades. Specifically, the Energy Efficient Home Improvement Credit and the Residential Clean Energy Credit have both been terminated under H.R. 1, enacted on July 4, 2025.

Here we discuss what energy tax credits were previously available, how the law has changed and what you need to know moving forward.

Please note: This article is for informational purposes only and does not constitute personal tax advice. For guidance tailored to your specific situation, consult with a qualified tax professional.

What are energy tax credits?

Energy tax credits were federal incentives designed to encourage homeowners to adopt more energy-efficient technologies. These programs provided dollar-for-dollar reductions in tax liability for qualifying home upgrades.

In 2023, the average household qualified for approximately $880 in credits. However, due to changes enacted via H.R. 1 (2025), these benefits are no longer available. Below, we’ll discuss what exactly has changed and how those changes impact homeowners.

Key impacts of these changes

With the passage of H.R. 1 (U.S. Congress, H.R. 1, 2025. Sections 70505 and 70506), the following tax programs have been terminated:

Residential Clean Energy Credit

Previously, this credit allowed homeowners to claim 30% of the cost of renewable energy systems like solar panels, geothermal heat pumps, fuel cells, battery storage and wind turbines.

Energy Efficient Home Improvement Credit

Previously, this credit allowed homeowners to claim up to $1,200 annually (or up to $2,000 for heat pumps and biomass systems) for qualifying home improvements, including windows, doors, HVAC systems, insulation and energy audits.

The passing of H.R. 1 on July 4, 2025, immediately ended these federal credits, meaning that homeowners are no longer able to claim these benefits for upgrades.

If you made energy-efficient upgrades before H.R. 1 passed

If you installed qualifying equipment prior to the July 4, 2025, enactment of H.R. 1, you may still be eligible to claim tax credits for that installation, provided it meets the previous program’s qualifications and was installed during a tax year prior to legislative termination.

Whether a tax credit or provision still applies to you depends on your specific situation, since H.R. 1 introduced different effective dates for each change. If your installation happened close to one of those cutoffs, we recommend checking with a tax professional to see if you’re still eligible.

What options are still available?

While federal tax credits for energy efficiency have ended, there are several options to help homeowners interested in improving their homes' sustainability:

State and local incentives

Many states and municipalities still offer rebates, tax breaks or utility-run programs for upgrading to energy-efficient home appliances and systems. Visit the Department of Energy DSIRE database or ENERGY STAR Rebate Finder to see what's available in your area.

Renewable energy certificates (RECs)

Recent legislative changes under H.R. 1 have not impacted the Renewable Energy Certificate program. Renewable energy certificates (RECs) remain a valuable way to support the renewable energy economy, offset emissions and meet renewable portfolio standards (RPS).

By purchasing RECs, individuals and companies can still match their electricity use with renewable sources like wind and solar. This helps maintain momentum toward sustainability goals, despite the loss of federal tax incentives.

Understanding energy efficiency beyond tax credits

Even without federal credits, investing in energy efficiency can provide long-term savings. Lower energy bills, increased home comfort and energy efficiency remain strong reasons to upgrade your home. Here are some key tips:

Look for ENERGY STAR® certified products
Conduct an energy audit (local incentives may apply)
Consider smart thermostats and efficient lighting

For more ways to save, read our blog that covers 25 energy-efficient tips.

Stay informed as policies evolve

Energy policy is dynamic. While H.R. 1 has ended certain federal programs, new opportunities may emerge. For the latest programs, visit the IRS website or check with the Department of Energy (DOE) for national and state-specific programs that may be available in your area.

Please note, we do advise consulting with a licensed tax professional before making any final decisions.

Moving forward with fewer tax credits

While the Energy Efficient Home Improvement Credit and Residential Clean Energy Credit are no longer available, your efforts toward a more sustainable, energy-efficient home can still offer valuable returns in savings, comfort and environmental impact.

Visit our learning center for more green living tips, energy-saving strategies and updates on evolving energy policies.

Please note: This article is for informational purposes only and does not constitute personal tax advice. For guidance tailored to your specific situation, consult with a qualified tax professional.

Pick your service location

The phaseout of energy tax credits: What you need to know

What are energy tax credits?