Federal Clean Energy Tax Credits
If you’ve been thinking about installing solar panels, buying an electric vehicle, making your home more energy efficient, or upgrading your home with cleaner and more affordable energy — don’t miss out on federal clean energy tax credits.
With these tax credits, choosing rooftop solar, heat pumps, or electric vehicles can save you thousands of dollars up front and lower your monthly energy bills.
However, these federal incentives are set to expire this year. Some examples include:
- Electric Vehicle (EV) Credits: Some new and used EVs qualify for federal tax credits of up to $7,500 until September 30, 2025.
- Residential Clean Energy Credits: Claim 30% of the total cost of solar panels, battery storage, and geothermal systems if you buy by December 31, 2025.
Energy Efficient Home Upgrade Credits: Make home energy upgrades, like insulation, windows, or efficient electric appliances, by December 31, 2025, to claim the credit.
| New EV (30D) | Up to $7,500 for a new vehicle from a registered dealership. | Vehicles acquired before September 30, 2025, are eligible. |
| Used EV (25E) | Up to $4,000 for a used vehicle from a registered dealership. | Vehicles acquired before September 30, 2025, are eligible. |
EV charger (30C) | Up to $1,000 for the purchase and installation of an EV charger on your home. | Chargers placed in service before June 30, 2026, are eligible |
Heat pump air conditioner / heater (25C) | Up to $2,000 for a heat pump air conditioner / heater. | Installations before December 31, 2025, are eligible |
Heat pump water heater (25C) | Up to $2,000 for a heat pump water heater. | Installations before December 31, 2025, are eligible. |
Weatherization / insulation (25C) | Up to $1,200 for weatherization upgrades and improvements like insulation and air sealing. | Installations before December 31, 2025, are eligible |
Electrical panel (25C) | Up to $600 for installation of an electrical panel. | Installations before December 31, 2025, are eligible |
Home energy audit (25C) | Up to $150 to conduct a home energy audit. | Installations before December 31, 2025, are eligible |
Rooftop solar installation (25D | 30% of qualifying costs related to the purchase and installation of solar panels on your home. | Installations before December 31, 2025, are eligible. |
Battery storage installation (25D) | 30% of qualifying costs related to the purchase and installation of battery storage on your home. | Installations before December 31, 2025, are eligible. |
Geothermal heating installation (25D) | 30% of qualifying costs related to the installation of geothermal heat pumps on your home. | Installations before December 31, 2025, are eligible |
Elective or Direct Pay
For new EV chargers, the federal government also opened a new pathway called elective pay (or direct pay), which allows tax-exempt entities (non-profits, state/local governments, schools, tribes, houses of worship, etc.) to receive a direct cash payment from the IRS in lieu of a tax credit when they invest in qualifying projects.
Normally, federal tax credits (like for EV chargers) reduce the tax bill of a company or individual. But tax-exempt groups don’t pay taxes, so they couldn’t benefit—until now. With Direct Pay, tax-exempt entities can get a check from the government worth the value of the credit, making clean energy investment more accessible.