Tax Credits for Energy-Efficient Home Improvements in 2026

Can homeowners still claim federal energy-efficient home tax credits in 2026? Yes, but only for upgrades completed and placed in service by December 31, 2025. This guide explains which projects still qualify when filing your 2025 tax return, how to qualify and apply, and provides a clear breakdown of eligible home upgrades and their corresponding tax credits, along with energy-saving incentives still available going forward.

Important 2026 Update: 

• Most federal residential energy tax credits expired for projects placed in service after December 31, 2025 under the One Big Beautiful Bill Act of 2025. However, homeowners may still claim eligible credits on their 2025 tax return filed in 2026, provided all IRS requirements are met.

• The tax filing deadline is Wednesday, April 15.

The 2026 filing year represents the final opportunity for many to claim the 30% credit on installations like heat pumps, insulation, and energy-efficient windows. Understanding specific IRS requirements and annual limits is essential for maximizing these returns before the program concludes.

What Are Tax Credits?

A tax credit is money that a taxpayer can deduct directly from the taxes that they owe. It’s important to note that they are different from tax deductions, which reduce the taxable income of an individual. 

Example: If you owe $1,000 in taxes, but you installed energy-efficient windows in your home, you can reduce this tax bill. If the total cost for the window installation was $2,000, you could be eligible for the 30% tax credit which would amount to $600. Therefore, your tax credit would mean your tax bill would now drop from $1,000 to $400.

Tax credits let federal and state governments promote certain behaviors, such as promoting helping the environment. Hence tax credits for energy-efficiency home upgrades.

Energy-Efficient Home Improvement Credits (25C)

The Energy-Efficient Home Improvement Credit, governed by IRS Section 25C, applies to qualifying upgrades made to an existing primary residence in the U.S.

Improvement Type	Maximum Annual Credit
Heat Pumps / Biomass Stoves	$2,000
Windows & Skylights	$600
Exterior Doors	$500
Central Air / Furnaces / Water Boilers / Water Heaters	$600
Insulation & Air Sealing	$1,200
Home Energy Audit	$150
EV Charger	$1,000*

Below is a breakdown of what is needed to qualify for each product and improvement tax credit. No credits are allowed for any qualifying property placed in service unless it was produced by a qualified manufacturer.

Requirements for Each Energy-Efficient Home Improvement

1. Heat pumps and biomass stoves and boilers:

To qualify for up to $2,000 a year, the stove or boiler must have an efficiency rating of at least 75%. The improvements that qualify include new electric or natural gas heat pumps, water heaters, and biomass stoves and boilers. The heat pumps must meet the highest efficiency tier of the Consortium for Energy Efficiency (CEE).

2. Insulation and air sealing materials or systems:

These improvements have to meet the International Energy Conservation Code (IECC)standards that were in effect at the start of the year, two years before installation. For example, if you installed insulation in 2025, it must meet the IECC standards set as of January 1st, 2023. Insulation and air sealing materials or systems are the only qualifying property types that do not have to meet the PIN and qualified manufacturer requirements. 

3. Exterior windows, skylights and doors:

For windows and skylights the maximum is $600, for exterior doors it’s $500 (up to $250 each). To qualify they need to meet applicable Energy Star requirements. 

4. Central air conditioners, water heaters, furnaces, and hot water boilers:

These items need to meet the Consortium for Energy Efficiency’s (CEE) highest efficiency tier, not including any advanced tier, that was in effect at the start of the year when the product was installed. The limit is $600 per item.

5. Electric panel or circuit upgrades for new electric equipment:

Anything installed must meet the National Electric Code (NEC) and have a capacity of 200 amps or more. 

6. Home energy audit:

To qualify for a tax credit on a home energy audit you must have a written report and inspection that identifies significant and cost-effective energy efficiency improvements are needed. This inspection must be conducted by a qualified home energy auditor certified by a Department of Energy-approved program or supervised by a certified auditor. 

7. Home electric vehicle charger:

The Alternative Fuel Vehicle Refueling Property Tax Credit is only available for those residents who live in non-urban or low-income communities. Your home must also be your primary residence. *Equipment placed in service after June 30, 2026. will no longer be eligible for tax credits under the current law.

Who Qualifies for Federal Energy Tax Credits?

For qualified improvements placed in service from 2023 through December 31, 2025, eligible homeowners may claim a tax credit of 30% of qualifying costs.

To qualify for the Energy-Efficient Home Improvement Credit (IRS Section 25C), your home must meet the following requirements:

• Your home is located in the U.S.

• The improvement was made to an existing home. 

• The property is your primary residence (with limited exceptions). 

If you also use your home for business purposes, here's how you can get credit for eligible clean energy expenses:

• If your business use is up to 20% you can receive full credit.

• If your business use is more than 20% the credit is based on the share of expenses apportionable to nonbusiness use.

If your property is used solely for business, you cannot claim credit.

Who Does Not Qualify for Federal Energy Tax Credits?

• Rental-only properties

• New construction (except under Section 25D)

• Homes used exclusively for business

• Products without a qualified manufacturer PIN

• Projects started or placed in service in 2026

Renewable Energy Home Improvement Credits

The Residential Clean Energy Credit (25D), also known as the federal solar tax credit, is a way to incentivize homeowners to install clean energy products such as solar panels or other eco-friendly devices in their homes. This credit can cover installation expenses and could cut your federal income tax bill by a significant amount, potentially saving you thousands of dollars. This credit is not available for any property placed in service after December 31, 2025.

For the 2025 tax year, Residential Clean Energy Credit is equivalent to 30% of the expenses for the following:

1. Solar panels: Solar photovoltaic energy system (solar panels) must provide electricity for the home and meet fire and electrical code requirements in order to qualify for this credit. However, it does not need to be your primary residence. Both existing properties and new homes qualify. Rentals do not qualify for the federal solar tax credit.

2. Solar water heaters: To qualify for a tax credit for a solar water heater the system must power the residence and comply with your state’s government-endorsed entity requirements for solar rating or that of the Solar Rating and Certification Corporation (SRCC). Expenses for swimming pools or hot tubs are not included in this credit. Installation expenses for the water heater are included and similarly to solar panels, it does not need to be your main residence. 

3. Fuel cells: Fuel cells are limited to $500 for each one-half kilowatt of property capacity. To qualify for credit they need to have a capacity of at least 0.5 kW and an electricity-only generation efficiency greater than 30%. Unlike solar panels and water heaters, your home must be your primary residence. This includes a house, condo, mobile home, houseboat, manufactured home, and cooperative apartment. Installation costs are included in the tax credit. 

4. Battery storage technology: Suppose you have installed battery storage in your primary or secondary residence. In that case, whether it’s a new construction or an existing home, you can qualify for a clean energy tax credit so long as the technology has a capacity of 3 kWh or greater.

5. Geothermal heat pumps: Geothermal heat pumps qualify for a tax credit as long as they meet Energy Star requirements in effect at the time of purchase in your primary or secondary residence, be it a new or existing home. 

6. Small wind turbine: The kinetic energy from a small wind turbine on your property can be tax credited along with the installation costs. Both new and existing homes qualify and it does not need to be your primary residence. Small turbines range in size from 20 Watts to 100 kW.

How to Apply for Federal Tax Credits for Energy-Efficient Upgrades When Filing in 2026 

Once you’ve figured out if you qualify for an energy-efficient or renewable energy home improvement tax credit, you need to know how to go about applying for it. You can only apply for the credit during the year in which you installed the new system, not the year in which you purchased it.

For energy efficiency improvements installed in 2025, you are required to link each product to your tax credit claim using the manufacturer’s four-digit Qualified Manufacturer Identification Number (QMID). 

This applies to:

• Heat pumps (outdoor units only)

• Water heaters

• Central air conditioners (CAC)

• Boilers

• Furnaces

• Biomass stoves

• Windows, doors, and skylights

• Electric panel upgrades (require the QM code now and will continue to do so in future years)

FAQs

For 2025, the Energy Efficiency Tax Credit allowed homeowners to claim 30% of qualifying expenses for eligible energy-efficient home improvements and certain clean energy products.

The Energy-Efficient Home Improvement Credit applies to certain upgrades you make to your home that improve energy efficiency. For the 2025 tax year, qualifying improvements include:

• Heat pumps (outdoor units only)

• Biomass stoves, boilers, furnaces, and water heaters

• Insulation and air sealing materials or systems

• Exterior windows and skylightsExterior doors

• Central air conditioners

• Electric panel upgrades

• Home energy audits

To qualify for a tax credit, windows must meet the applicable Energy Star requirements. The credit for energy-efficient windows typically covers 30% of the cost, but there is a $600 annual limit for all windows and skylights installed each year.

Several energy-efficient appliances are eligible for tax credits, including biomass stoves and boilers, heat pumps, water heaters, natural gas boilers, furnaces, and central air conditioners. These appliances must meet energy efficiency standards to qualify for the tax credit.

Yes. If your project was placed in service in 2025 and meets IRS requirements, you may claim the credit when filing in 2026.