What is the current status of this program?
The IRA made these credits available through 2032, but the budget reconciliation bill signed on July 4, 2025 eliminates them at the end of 2025. Your home improvements must have been placed in service by December 31, 2025 to qualify for the credit.
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?
The credit is available only for improvements placed in service on or before December 31, 2025.
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?
The budget reconciliation bill signed July 4, 2025 ends this credit after 2025. Your home improvements must be placed in service by the end of 2025 to be eligible for the credit. Excess credit not used on your 2025 tax return cannot be carried forward to future tax years.
Some Facts on EEHIC Tax Credit Use in NC (from Rewiring America)
- In 2023, more than 62,000 North Carolina families used the Energy Efficient Home Improvement Credit (25C) and saved an average of $1,008 on their taxes.
- The 85,000 North Carolina families who used 25C and/or 25D in 2023 generated $1.1 billion in economic activity and supported 4,015 jobs in the state.
- Over 1,100 energy-efficiency contractors — including 47 in North Carolina — signed a letter supporting 25C, which has also spurred in-state investment by manufacturers like A.O. Smith, Daikin, Trane, and Stepan.
- Over 969,000 North Carolina households—58% of all homes—use costly fuels like propane or inefficient electric resistance. With potential savings of $2,530 a year, these homes have the most to gain from 25C and 25D, and the most to lose if they’re eliminated.
- Widespread adoption of 25C upgrades in the residential sector would enable annual peak demand reductions north of 1 gigawatt, enough to power more than 30 data centers running at full capacity.
What other incentives could I use to help me accomplish my goals?
- In July 2025, the NC Clean Energy Fund (now: Clean Energy Fund of the Carolinas) launched Carolina SURE (Smart Upgrades for Residential Efficiency), a consumer lending program for home electrification and energy efficiency improvements in North and South Carolina.
- HEAR and HER rebates may be more beneficial if you don’t pay enough taxes to use the tax credits.
- 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.
- Check out our (non-exhaustive) list of non-federal funding from other sources that may fit your energy and cost-saving goals.
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).