This credit is unaffected by funding freezes. The IRA made it available through 2032. Congressional action in 2025 may change that timeline or remove some credits, but changes should not take effect until the 2026 tax year at the earliest. However, there is broad support for this credit in Red and Blue states, so we are cautiously optimistic. Tell your legislators you want the credit to continue!
What does this funding get me?
This funding is a nonrefundable tax credit and is up to $3,200 per year for energy efficiency improvements, residential energy property expenses, and home energy audits. The credit equals 30% of qualified expenses.
Am I eligible?
Individual homeowners are eligible. The home must be a place you live in and an existing home that you improve or add on to, not a new build.
Renters who make improvements to their principal place of residence (with the landlord’s approval) are also eligible to take most of these credits (see note below on certain exceptions).
To qualify, home improvements must meet energy efficiency standards. These can include either Energy Star requirements or the International Energy Conservation Code standards; see the bottom of this page for detailed information.
Examples of eligible improvements include:
- $1,200 for energy property costs and certain energy efficient home improvements
- A limit of $500 on doors ($250 per door, and two doors maximum)
- $600 for windows
- $150 for a home energy audit
- $2,000 per year for qualified heat pumps, biomass stoves or biomass boilers
Renters are eligible for the tax credit on all improvements except exterior doors, windows and skylights, insulation materials or systems, and air sealing materials or systems (see IRS fact sheet, p. 5).
How can I access the money?
You can find the form you need to fill out to apply for the tax credit here. You must claim the credit for the tax year when the property is installed, not merely purchased.
What is the timeline?
This credit is available now. This credit has no lifetime maximum dollar limit. You can claim the maximum annual credit every year that you make eligible improvements through 2032. The credit is nonrefundable, so you can’t get back more on the credit than you owe in taxes. You can’t apply any excess credit to future tax years.
What other incentives could I use to help me accomplish my goals?
- Residential Clean Electricity Investment Tax Credit
- HEAR and HER rebates may be more beneficial if you don’t pay enough taxes to use the tax credits (latest estimate is that these programs will launch in January 2025).
- Check your utility’s website for additional energy efficiency incentives.
- In South Carolina, check out the state’s Energy Saver Tool.
- Check the Database of State Incentives for Renewables & Efficiency (DSIRE) for additional incentives that may be offered by your state, local government, or utility, as well as important federal, state, and local policies. For questions regarding DSIRE, contact Justin Lindemann (NC Clean Energy Technology Center) at jplindem@ncsu.edu.
Where can I get more information?
- Energy Saver page with full details on these credits
- IRS web page for this credit
- Frequently Asked Questions Fact Sheet for this credit
- Air source heat pump tax credit
- Exterior doors tax credit
- Windows and skylights tax credit
- NC Clean Energy Technology Center’s Word to the Wise guide to home energy upgrades, which has more information on this incentive and others, plus hints on hiring contractors (English) (Spanish)
- Sierra Club Shopping Guide for Healthy & Affordable Home Upgrades
- Rewiring America offers a tax credit calculator to help you maximize your tax credits on home energy upgrades. *Due to Rewiring America’s changed privacy policy, any data you input may be sold to third parties.
- For specific questions on this credit or for more assistance, please contact Meech Carter at info@energyfundsforall.org. Please note this contact is not a certified tax professional.
Testimonials
Tara and Dustin got a tax credit for encapsulating their crawlspace.
Vickie and Ped of Chatham County received $9000 in tax credits for a plug-in hybrid vehicle, charging station, and heat pump water heater that reduced both their fuel costs and their greenhouse gas emissions.
Dale of Durham saved $2,850 by combining the Federal tax credit and utility rebate when buying his new heat pump (see 1:40 in this video, or watch the whole thing to hear about his savings on a used EV and EV charger).