For homeowners who installed qualifying smart thermostats in 2025, the Section 25C credit can still be claimed on 2025 federal tax returns. Here's what it covered:
ENERGY STAR certification remains the key requirement for most utility rebate programs. Current qualifying models include:
| Model | ENERGY STAR | Utility Rebate Eligible | Retail Price (2026) |
|---|---|---|---|
| Nest Learning Thermostat | Yes | Yes (most programs) | ~$250 |
| Nest Thermostat (standard) | Yes | Yes (most programs) | ~$130 |
| Ecobee Smart Premium | Yes | Yes (most programs) | ~$250 |
| Ecobee Smart Enhanced | Yes | Yes (most programs) | ~$190 |
| Honeywell T9+ | Yes | Yes (most programs) | ~$200 |
| Amazon Smart Thermostat | Yes | Yes (many programs) | ~$60 |
Verify eligibility on your utility's rebate portal before purchasing — approved model lists vary by program and are updated periodically.
Utility rebates are funded by your electric or gas company's energy efficiency programs — they are separate from federal tax law and continue in 2026. They're typically paid as instant rebates at point of purchase, mail-in rebates, or credits on your utility bill.
The DSIRE database (dsireusa.org) is the most comprehensive source. Search by zip code and filter for "thermostat" incentives. You'll see state and utility-level programs in a single view.
Typical utility rebate amounts in 2026:
Some utilities require you to enroll the thermostat in a demand response program to receive the rebate — meaning they can briefly adjust your temperature during grid stress events (typically a few degrees for a few hours, a few times per summer). Most programs let you override the adjustment manually.
| State | Program | Smart Thermostat Rebate (2026) | Notes |
|---|---|---|---|
| California | PG&E, SCE, SDG&E programs | $85–$200 | Demand response enrollment often required |
| New York | Con Edison / National Grid | $75–$150 | Income-qualified programs may offer more |
| Texas | Oncor, CenterPoint programs | $50–$100 | Deregulated market — check your specific utility |
| Massachusetts | Mass Save | $75–$100 | One of the most comprehensive efficiency programs in the US |
| Colorado | Xcel Energy, Black Hills | $75–$100 | Colorado Energy Office has additional state programs |
| Oregon | Energy Trust of Oregon | $100–$150 | Non-profit program, broad utility participation |
Several states administer income-based rebate programs for energy efficiency improvements, including smart thermostats. Eligibility and availability vary by state — contact your state energy office or check dsireusa.org to see what income-qualified programs are currently active in your area.
The math still works. A Nest Learning Thermostat at $250, combined with a $100 utility rebate, brings your out-of-pocket cost to $150. A smart thermostat typically saves $50–$145/year on energy bills by learning your schedule and avoiding heating/cooling empty spaces. Payback period without the federal credit: 1–3 years. The economics are still solid.
If you installed a qualifying smart thermostat in 2025, here's how to claim the credit on your 2025 return:
No. The Section 25C Energy Efficient Home Improvement Credit expired December 31, 2025 under the One Big Beautiful Bill Act (OBBBA). Thermostats purchased in 2026 do not qualify. If you installed a qualifying device in 2025, you can still claim the credit on your 2025 federal tax return using IRS Form 5695.
Utility rebates remain available through your electric or gas company. Major programs: PG&E, Mass Save, Xcel Energy, Oncor, CenterPoint, Energy Trust of Oregon. Typical amounts: $50–$200. Search DSIRE (dsireusa.org) by zip code to find programs in your area.
Most Nest models carry ENERGY STAR certification and qualify for utility rebate programs where available. Check your specific utility's rebate portal — eligibility varies by program and is updated periodically.
Use IRS Form 5695, Part II for the Section 25C Energy Efficient Home Improvement Credit. This applies only to qualifying purchases made in 2025. It does not apply to 2026 purchases.
Without the federal tax credit, savings come from utility rebates ($50–$200) plus ongoing energy savings ($50–$145/year). Over a 5-year period, total savings can reach $300–$900 depending on your climate, home size, and utility rates — making smart thermostats a sound investment even without federal incentives.