2 Clean Energy Credits Now Expire 12/31/25 as a Result of the “One Big Beautiful Bill Act”
Similar to the news I shared on the expedited new EV tax credit expiration deadline, I wanted to share another notable time-sensitive tax-incentive update resulting from the Republican Congressional reconciliation tax bill (aka “One Big Beautiful Bill Act (OBBBA)”) that was enacted on July 4, 2025. The 2 most popular energy tax credit incentives currently available to taxpayers – the Energy Efficient Home Improvement Credit and Residential Clean Energy Credit – now both expire on December 31, 2025. I’ll provide a quick primer on each of these credits in this article, but check out my in-depth clean energy tax credit overview for full details on each. If you were thinking about doing upgrades – now is the time to act.
The Energy Efficient Home Improvement Credit (25C) Now Expires 12/31/25
The “Energy Efficient Home Improvement Credit”, also referred to as a “25C tax credit” in reference to the section of the tax code that it comes from, offers up to $3,200 in energy efficiency tax credits per year. It had previously been enhanced and extended to last through 2032 as part of the Inflation Reduction Act of 2022. Similar to the EV tax credits that were enhanced and extended in the same legislation, it will now end early, with the OBBBA changes. The Energy Efficient Home Improvement Credit now expires 12/31/25.
Through the The Energy Efficient Home Improvement Credit, you could claim up to (per year):
1. A $1,200 combined annual maximum tax credit for the following categories of energy efficiency home improvement products, each with their own specific annual limits:
- $150 limit for qualified home energy audits.
- $250 limit for qualified exterior doors ($500 total for all exterior doors).
- $600 limit for qualified exterior windows and skylights.
- $600 limit (per item) for other qualified energy property, including central air conditioners; electric panel upgrades and certain related equipment; natural gas, propane, or oil water heaters; oil furnaces; water boilers.
- $1,200 limit for building envelope (insulation) products.
Plus:
2. A $2,000 combined annual maximum tax credit limit for heat pump and heat pump water heaters; biomass stoves and boilers. This category of improvement is not limited by the $1,200 annual limit on total credits or the $600 limit on qualified energy property.
The Residential Clean Energy Credit (25D) Now Expires 12/31/25
The “Residential Clean Energy Credit”, also referred to as a “25D tax credit” in reference to the section of the tax code that it comes from, offers a 30% non-refundable tax credit for major renewable energy installations such as solar, wind, geothermal, fuel cells, and battery energy storage. It had previously been enhanced and extended to last through 2034 as part of the Inflation Reduction Act of 2022. It also will now end early, with the OBBBA changes. The Residential Clean Energy Credit now expires 12/31/25.
The Residential Clean Energy Credit provides a 30% tax credit (including installation costs) for the following renewable energy projects:
- Solar electric panels
- Solar water heaters
- Wind turbines
- Geothermal heat pumps
- Fuel cells
- Battery storage technology
The High-Efficiency Electric Home Rebate Act (HEEHRA) and the HOMES (Home Owner Managing Energy Savings) Rebate Programs have Survived the OBBBA
The Inflation Reduction Act also had created 2 completely new energy rebate programs: the “High-Efficiency Electric Home Rebate Act (HEEHRA)” and the “HOMES (Home Owner Managing Energy Savings) Rebate Program”. Both energy rebate programs were designed to provide point-of-sale rebates to homeowners through state governments. Rollout in the states has been slow, but has already started in many.
Funds for these rebate programs (fingers-crossed) appear to have survive the OBBBA. Each program will be funded at just over $4 billion each, with an expiration September 30, 2031. Funding is first-come, first-serve, so you may not want to hesitate on a project once a rebate program is live in your state.
Perhaps this was an oversight? We’ll take our wins where we can get them, I suppose. Check out the full clean energy tax credits and rebates article referenced earlier, if you want to find out more about these rebates.
