There are several reasons to make your home more energy-efficient. Energy saving upgrades can help lower your utility bills, reduce your carbon footprint, and increase your home’s comfort and value. However, many federal tax incentives that previously helped offset the cost of energy-efficient upgrades, including the Residential Clean Energy Credit and Energy Efficient Home Improvement Credit, expired for qualifying improvements made after December 31, 2025, under changes made by the One Big Beautiful Bill Act (OBBB).
Homeowners who completed eligible projects before the end of 2025 may still be able to claim these credits when filing their 2025 federal tax return. Keep reading to learn about the federal energy tax credits that were available through 2025, what improvements qualified, and how homeowners who completed eligible upgrades may still be able to claim these benefits.
Can I still claim energy-efficient tax credits?
The One Big Beautiful Bill Act (OBBB) significantly changed federal energy tax credits, including the Residential Clean Energy Credit and the Energy Efficient Home Improvement Credit. Most residential energy credits are no longer available for qualifying improvements placed in service or expenditures made after December 31, 2025.
While these credits are no longer available for most new home energy projects, taxpayers may still claim these credits on a prior-year tax return if they were eligible under the rules in effect for that tax year.
How you previously claimed the Residential Clean Energy Credit
The Residential Clean Energy Credit (formerly known as the Residential Energy Efficient Property Credit) applied to new installations and upgrades to renewable energy systems (in both new builds and existing homes). The following energy-efficient installations qualified for the credit:
- Qualifying solar electric systems
- Solar water heating systems
- Small wind energy systems
- Geothermal heat pumps
- Qualifying fuel cells
- Battery storage technology
The Residential Clean Energy Credit was worth up 30% of the costs for qualifying home improvements completed on your primary residence only. The credit was nonrefundable and there was no AGI limitation. In general, there was no dollar cap on the credit amount, although fuel cells were subject to a limit of $500 for each half kilowatt of capacity.If you made energy-saving improvements to your primary home during the applicable tax year, you may have qualified for the residential renewable energy tax credit. The system can be installed on a new build or an existing home. Eligible renewable energy systems included:
- solar electric systems (solar panels)
- solar water heaters (not used for swimming pools or hot tubs)
- geothermal heat pumps
- small wind turbines
- fuel cells
How you previously claimed the Energy Efficient Home Improvement Credit
The Energy Efficient Home Improvement Credit (formerly known as the Nonbusiness Energy Property Credit) provided a tax credit equal to 30% of the total amount paid for qualified energy-efficiency property improvements (up to $1,200 per year). The credit included the following limits for specific types of improvements:
- $600 for any single energy-efficient appliance such as advanced main air circulating fans, central air conditioning, hot water heaters, furnaces, electric heat pump water heaters fueled by gas, propane, or oil, insulation materials, or metal or asphalt heating.
- $600 for windows and skylights
- $500 for exterior doors ($250 per door)
- $150 for energy audits
In addition, homeowners could claim up to $2,000 for qualifying heat pumps, air source heat pumps, biomass stoves, and furnaces. If you had both types of energy-efficient-related expenses, you could claim up to $3,200 per year on qualifying home improvements.
Examples of expenses that did not qualify for the Energy Efficient Home Improvement credit included:
- Used or previously installed equipment
- New construction: This credit is only for existing homes – not for newly built homes.
- Labor costs for certain items: Labor for installing envelope components like insulations, windows, and doors does not qualify.
- Items that don’t meet ENERGY STAR or IECC standards
- You were eligible to claim the Energy Efficient Home Improvement Credit if you were making qualifying home improvements on your primary residence, not installations on a new build. The credit was nonrefundable and expired for property places in service after December 31, 2025.
How to fill out Form 5695 to claim residential energy credits
You can claim the Residential Clean Energy Credit and the Energy Efficient Home Improvement Credit using IRS Form 5695. To fill out this form, you’ll need to gather documentation of the energy-efficient improvements, such as receipts, invoices, manufacturer certifications, and records showing when the equipment was installed and placed in service.
Depending on the type of improvement, taxpayers may also need documentation identifying the product model number, efficiency rating, certifications, or other eligibity requirements established by the IRS.
What appliances qualified for energy tax credits?
While appliances like dishwashers and refrigerators may have reduced your energy and save you money on utilities, there is no tax credit for these kinds of in-home purchases. The credit applied to alternative energy equipment such as solar panels and geothermal heat pumps. See above for the complete list of systems that did qualify.
Can I claim a tax credit for my energy-efficient vehicle?
The Clean Vehicle Tax Credit, formerly known as the Plug-In Electric Drive Motor Vehicle Credit, provided up to $7,500 for qualifying new electric vehicles and up to $4,000 for qualifying used electric vehicles purchased between 2023 and September 30, 2025. To qualify, vehicles generally had to meet requirements related to final assembly in North America, battery sourcing, manufacturer eligibility, vehicle price limits, and taxpayer income limits.
Eligible vehicles included certain all-electric, plug-in hybrid, and hydrogen fuel cell vehicles. Under rules in effect at the time, leased vehicles were often treated differently, allowing leasing companies to claim the credit and potentially pass the savings to consumers through lower lease costs.
The credit expired for vehicles acquired after September 30, 2025, and is no longer available for new consumer vehicle purchases. However, taxpayers who purchased an eligible vehicle while the credit was in effect may still be able to claim the credit on a prior-year return if they met all requirements.For more information on the standards used to qualify products as “energy-efficient,” visit wws.irs.gov or www.energystar.gov.
