Guide
IRA clean energy tax credits update: Credits expiring in 2025
With the recent passage of the One Big Beautiful Bill Act (OBBB) by Congress, many Inflation Reduction Act (IRA) energy efficiency and clean energy tax credits will be sunsetting as soon as December 31, 2025. We want to make sure you’re prepared for this upcoming change and can make informed decisions about planned upgrades within your home.
If you received a DCSEU rebate for a home energy efficiency upgrade in 2025, you may still qualify for a tax credit on your upgrade as well.
Please note that eligibility and specific details vary, so we always recommend consulting a tax professional for more information.
Here are some of the impacted residential tax credits and when they will expire:
Solar and home energy efficiency tax credits
Rooftop Solar
The Residential Clean Energy Credit (25D) funded by the IRA allows households to receive a tax credit up to 30% of the cost of buying and installing rooftop solar. This credit also helps cover the cost of installing solar water heaters, battery storage systems, small wind turbines, fuel cells and geothermal heat pumps. Plus, there’s no cap on how much money you can claim under this credit. It’s a great credit to take advantage of, but going solar could still be a good idea for your home even after it expires since the District is one of the best places for rooftop solar in the country.
When does it end?
Your project must be in progress before December 31, 2025 to qualify.
Energy-Efficient Upgrades
Homeowners filing for the 2025 tax year can still receive an Energy Efficient Home Improvement Credit (25C) to cover up to 30% of the cost of energy-efficient swaps (up to an annual maximum of $1200, or a separate $2,000 limit for heat pumps, biomass stoves, and boilers). This credit is subject to per-item limitations.
When does it end?
Your project must be in progress before December 31, 2025 to qualify.
Credits include:
Energy Efficient Equipment or Service | Credit Amount |
|---|---|
Windows and skylights | $600 across all windows |
Exterior Doors | $250 per door, $500 across all doors |
Insulation | No property-specific limit, but subject to annual limit |
Heat Pump Water Heaters | $2000 total |
Heat Pumps | $2000 total |
Biomass Stoves or Boilers | $2000 total |
Central Air Conditioners | $600 per AC unit |
Electric Panel Upgrade (Heavy-Up) | $600 per property |
Home Energy Audit | $150 total |
The DCSEU also has rebates available for energy-efficient electric home heating & cooling that you can combine with IRA tax credits to save an additional $50-$5,000 on these upgrades. You just need to make sure the credit and rebate amount doesn’t exceed the cost of the equipment. Once IRA tax credits expire, these DCSEU offers will still be available to District households.
Electric vehicles & home charging tax credits
Electric vehicle (EVs) and home EV chargers are still available for credits. The Alternative Fuel Vehicle Refueling Property Credit helps people living in low-income and non-urban census tracks get a credit for 30% of the cost to install an EV charger in their homes, up to a maximum of $1,000.
If you’re looking to purchase an EV bought, now might be the best time to do so to maximize savings. You can get a tax credit up to $7,500 for an eligible new EV and tax credit of 30% of the sale price up to $4,000 for an eligible used EV.
To qualify for the tax credit, your new electric vehicle must:
- Have a battery capacity of at least 7 kilowatt hours.
- Have a gross vehicle weight rating of less than 14,000 pounds.
- Be made by a qualified manufacturer.
- Undergo final assembly in North America.
- Meet critical mineral and battery component requirements (New requirements as of April 18, 2023).
View the full list of qualifications.
To qualify for this credit, your used electric vehicle must:
- Have a battery capacity of at least 7 kilowatt hours.
- Have a gross vehicle weight rating of less than 14,000 pounds.
- Be made by a qualified manufacturer.
- Have a sale price of $25,000 or less.
- Have a model year at least 2 years earlier than the calendar year it was purchased. For example, a vehicle purchased in 2025 must be a model year of 2023 or older.
- Not have already been transferred after August 16, 2022, to a qualified buyer.
View the full list of qualifications.
When does it end?
You must sign a lease or purchase agreement before September 30, 2025 to qualify for an EV tax credit.
You must install your home EV charger before June 30, 2026 to qualify for the Alternative Fuel Vehicle Refueling Property Credit.
Related Resources
Check out our resources that make upgrading to the most efficient equipment a breeze.
