Federal Energy Tax Credits 2026: IRA Credits Expired — Complete Guide to What Remains
This guide explains what changed, what you can still claim for 2025 purchases, and what incentives remain available in 2026.
What expired on December 31, 2025
Both major IRA residential energy credit programs were ended by OBBBA:
| Credit | What it covered | Max (2025) | Status in 2026 |
|---|---|---|---|
| Section 25C — Energy Efficient Home Improvement Credit | Heat pumps, insulation, windows, doors, AC, water heaters, energy audits | $3,200/year | Expired Dec 31, 2025 |
| Section 25D — Residential Clean Energy Credit | Solar panels, battery storage, geothermal, solar water heaters, small wind | 30% (no annual cap) | Expired Dec 31, 2025 |
The IRA (2022) had extended these credits through 2032–2034. OBBBA terminated them ahead of schedule. This was one of the most significant changes to residential energy incentives in decades.
What you can still claim for 2025 improvements
If you made qualifying improvements before December 31, 2025, you can still claim the credits on your 2025 federal tax return. Use IRS Form 5695 (Residential Energy Credits):
- Part I — Residential Clean Energy Credit (Section 25D): solar, battery storage, geothermal, etc.
- Part II — Energy Efficient Home Improvement Credit (Section 25C): heat pumps, insulation, windows, etc.
What incentives remain in 2026
Federal residential tax credits are gone, but meaningful incentives remain at the state and utility level:
State energy rebate programs
Many states operate their own rebate programs funded by state budgets or utility mandates — independent of federal tax law. Strong state programs remain active in Massachusetts (Mass Save), New York (NYSERDA/EmPower+), Connecticut, California, Colorado, Oregon, Maine, and Vermont, among others.
Check the DSIRE database (dsireusa.org) by zip code to find all state and local programs available for your address and planned improvements.
Utility company rebates
Hundreds of electric and gas utilities maintain weatherization and efficiency rebate programs funded by state rate mandates. These cover insulation, smart thermostats, HVAC upgrades, and more. Search your utility's website or DSIRE for current offerings.
Net metering for solar
Net metering — where your utility credits you for excess solar power sent to the grid — remains widely available and dramatically improves solar economics even without the federal credit. Policies vary by state and utility. California, New York, Massachusetts, Colorado, New Jersey, and many other states maintain strong net metering programs.
State solar tax credits
Several states have their own solar tax credits independent of Section 25D:
- New York: 25% state tax credit, up to $5,000
- Massachusetts: 15% state credit, up to $1,000
- South Carolina, Maryland, Montana, Utah: state-level credits
SREC markets
In states with Solar Renewable Energy Certificate programs (New Jersey, Massachusetts, Ohio, DC, and others), solar owners earn tradeable certificates per megawatt-hour generated. SRECs can be sold to utilities for $50–$400 each depending on state market conditions.
DOE Weatherization Assistance Program
The federal Weatherization Assistance Program (WAP) provides free weatherization services — including insulation, air sealing, and heating system improvements — to low-income households through state agencies. This is a separate DOE program from the expired tax credits. Check eligibility at energy.gov/eere/wap.
Section 25C in detail — for 2025 returns only
The following amounts applied to qualifying improvements installed by December 31, 2025:
| Improvement | Credit rate | Max credit |
|---|---|---|
| Heat pumps (air-source) | 30% | $2,000 |
| Heat pump water heaters | 30% | $2,000 (combined with heat pumps) |
| Insulation + air sealing | 30% | $1,200 (building envelope sub-limit) |
| Windows + skylights | 30% | $600 (part of $1,200 envelope limit) |
| Exterior doors | 30% | $250/door, $500 total |
| Central AC | 30% | $600 (part of $1,200 envelope limit) |
| Electric panel upgrade | 30% | $600 (part of $1,200 envelope limit) |
| Home energy audit | 30% | $150 (part of $1,200 envelope limit) |
Section 25D in detail — for 2025 returns only
The 30% Residential Clean Energy Credit covered these systems installed by December 31, 2025:
- Solar photovoltaic (PV) panels — 30% of total installed cost, no cap
- Battery storage systems (≥3 kWh) — 30% of cost, no cap
- Geothermal heat pumps — 30% of cost, no cap
- Solar water heaters — 30% of cost, no cap
- Small wind turbines — 30% of cost, no cap
Unused 25D credit from 2025 carries forward to future tax years.
Should you still make energy improvements in 2026?
The case for home energy efficiency hasn't changed — only the federal subsidy has. State and utility programs, combined with long-term energy savings, still make most upgrades financially sound:
- Insulation: Still ROI-positive in most climates. State programs cover 30–75% in many states. Payback: 3–7 years.
- Heat pumps: Higher upfront cost without federal credits, but utility rebates of $500–$2,000 remain common. Payback extended to 6–12 years depending on state programs.
- Solar: Longer payback without 25D, but viable in states with strong net metering and state credits. ROI still positive over system lifetime.
- Smart thermostats: Still worth it via utility rebates ($50–$200) — low cost, 1–2 year payback on energy savings alone.
For state-specific programs, use our rebate pages: California, Texas, New York, Massachusetts, Colorado.
Are the IRA energy tax credits still available in 2026?
No. The One Big Beautiful Bill Act (OBBBA, P.L. 119-21) repealed both Section 25C and Section 25D effective December 31, 2025. Purchases made in 2026 do not qualify. If you made qualifying improvements in 2025, you can still claim those credits on your 2025 return using IRS Form 5695.
What energy incentives are still available in 2026?
State energy rebate programs, utility weatherization rebates, net metering for solar, state solar tax credits (NY, MA, SC, others), SREC markets, and the DOE Weatherization Assistance Program (for low-income households) remain available. Check DSIRE (dsireusa.org) by zip code for programs in your area.
Can I still claim the 2025 energy tax credits on my return?
Yes. Qualifying improvements made before December 31, 2025 are claimable on your 2025 return using IRS Form 5695 — Part I for 25D (solar/clean energy) and Part II for 25C (efficiency improvements). Keep all receipts and manufacturer certification statements.
Did OBBBA repeal the solar tax credit?
Yes. OBBBA repealed Section 25D (the 30% Residential Clean Energy Credit for solar, batteries, and geothermal) effective December 31, 2025. The IRA had extended it through 2034, but OBBBA terminated it early. Solar installed in 2026 does not qualify for the federal residential credit.