Residential Energy Tax Credits: Going Out of Business Sale
Are you planning on getting an electric vehicle? Putting solar panels on your house? Making efficiency upgrades? Well, you'd better get moving because time is running out. The reconciliation bill, also known as the Big Beautiful Bill, has drastically shortened the timeline for getting tax credits for making those purchases. Previously, all these credits would phase out starting in 2032. No longer.
Electric Vehicle Tax Credits
📆 September 30, 2025
Let’s start with electric vehicles, because that expires on September 30, 2025. You can get $7500 off a new car or $4000 off a used vehicle. Keep in mind there are restrictions on who qualifies and which new vehicles and used vehicles qualify, so if you or the vehicle you want doesn’t qualify, then you can take your time. However, if you can obtain the tax credits, act quickly, as there will likely be a rush to buy EVs before the credits expire.
Clean Energy & Energy Efficiency Upgrade Tax Credits
📆 December 31, 2025
The rest of the individual incentive tax credits include the clean energy and energy efficiency upgrades. Those expire December 31, 2025. Contractors who install these items, especially solar installers, will be in high demand through the end of the year. Solar, wind, battery storage, and ground-source heat pumps get an uncapped 30% tax credit; the other products, which include air-source heat pumps, windows, doors, insulation, and some other efficiency upgrades, get varying amounts of tax credits. This even includes getting an energy audit. All of these products are subject to efficiency requirements.
IRA Rebates Are Still Around
The Inflation Reduction Act (IRA) had both tax credits and rebates for individuals. You get the tax credits when you file your taxes-those are the ones going away. The rebates you get at the point of sale, and so far, those still exist. In Pennsylvania, this is called the Penn Energy Savers program. It is set to start in the fall of 2025. This program offers rebates to low to moderate-income households to make energy efficiency upgrades.
Do NOT Be Misled By Memes
This graphic has been going around social media, saying that clean energy credits expire in mid to late 2026. This is referring to commercial solar and wind credits, not residential credits.
Businesses and nonprofits need to start their solar or wind projects before July 4, 2026, or complete the project by December 31, 2026, to get their credits.
The Clock is Ticking
Let this be your motivation to buy an EV and/or start your home efficiency projects now. Most projects cost more up front but save you money on your utility bills in the long run. The tax credits help offset those upfront costs. Do your research so you know which projects qualify for the tax credits and focus on getting those done before the end of the year. A good place to start is the Rewiring America savings calculator. Improve your home, your wallet, and the planet!
*This is for informational purposes only. Please seek a professional for tax advice before making any decision.