Clean Energy Credits Set to Expire Dec 31, 2025

The federal Residential Clean Energy Credit (RCEC), which includes solar electric panels, solar water heaters, wind turbines, geothermal heat pumps, fuel cells, and better storage technology is set to expire on December 31, 2025.  If you’re planning to upgrade your home with any of these energy-efficient improvements and want to take advantage of the credits before they expire, you should do so before December 31, 2025.

This credit covers 30% of qualifying upgrade costs, up to the following annual limits:

• $2,000 for qualified heat pumps and heat pump water heaters (labor and installation included)

• $600 for electrical panel upgrades when installed with a heat pump or HPWH (labor and installation included)

• $1,200 combined annual cap for insulation, windows, doors, and energy audits (not including labor and installation)

This credit is nonrefundable (it can reduce your tax bill but won’t result in a refund). Credit cannot be carried forward if your tax liability is lower than the eligible amount.

This separate credit covers 30% of the total cost for qualifying clean energy systems, with no annual or lifetime dollar cap (except for fuel cells).  Labor and installation costs are eligible.

• Solar panels and solar water heaters

• Geothermal heat pumps

• Battery storage systems

• Small wind turbines

• Fuel cells (capped by system size)

 This credit is nonrefundable, but any unused credit amount can be carried forward to future years.