Interested in making residential energy-efficiency or decarbonization upgrades? Now is a great time to schedule those projects. Several federal tax credits that help lower the cost of home improvements are set to expire, and completing your work before the deadline may allow you to maximize your savings.
Recent changes to federal law include the phase-out of tax credits for a range of upgrades, including building-envelope improvements such as windows and insulation, as well as installations like heat pumps, electric water heaters, rooftop solar, and EV chargers. Under these changes, the Energy Efficient Home Improvement Credit (26 USC 25C) and the Residential Clean Energy Credit (26 USC 25D) will end for on December 31, 2025. If you’ve been considering these improvements, scheduling now can help ensure you receive all available benefits before the federal credits sunset.
Even as federal incentives begin to wind down, SELCO’s own rebates and incentives are not going anywhere. We remain committed to supporting customers who are looking to improve their home’s efficiency, and lower energy use. Visit our rebates webpage at SELCO.ShrewsburyMA.gov/rebates to learn more.
Federal Tax Credits that have already been eliminated:
- New Clean Vehicle Tax Credit: The $7,500 federal tax credit for new electric vehicle purchases and leases is eliminated, effective September 30, 2025.
- Previously-Owned Clean Vehicle Credit: The $4,000 credit for used EVs (or 30% of the sales price for used EVs purchased through a dealer and under $25,000) is eliminated, effective September 30, 2025.
Federal Tax Credits that are being eliminated:
- Home Efficiency Upgrades (Energy Efficient Home Improvement Credit – 25C): This credit, which provides 30% of the cost of eligible home improvements up to an annual maximum of $3,200, is eliminated by December 31, 2025.
- Items included:
- Certain biomass stoves and boilers
- Electric panels and related equipment
- Home energy audits (up to $150)
- Exterior doors (up to $250 per door, $500 total)
- Qualified heat pumps, heat pump water heaters, and biomass stoves/boilers (up to $2,000 for this specific category, potentially exceeding the $1,200 annual limit for other items).
- Insulation, air sealing, and ventilation (part of the $1,200 annual limit for general efficiency upgrades).
- Items included:
- New Energy Efficient Home Credit (45L): This credit aimed at new construction energy efficient homes is also eliminated by the end of 2025.
- Solar, Heat Pump Installations, and Other Residential Clean Energy (Residential Clean Energy Credit – 25D): This credit, which provided 30% of the cost to install qualifying systems with no cap, is eliminated by December 31, 2025.
- Systems included:
- Solar panels (solar electric property)
- Solar water heating property
- Geothermal heat pumps
- Wind energy systems
- Biomass fuel cell property (credit limited to $500 for each one-half kilowatt of capacity)
- Battery storage technology
- Systems included:
- Home EV Charging Equipment Credit: The tax credit for installing home EV charging equipment (up to $1,000) is eliminated by June 30, 2026 (Inflation Reduction Act Alternative Fuel Refueling Property Tax Credit).
For more information, visit https://homes.rewiringamerica.org/save