Verified 26 August 2026

Home energy incentives in 2026

Both federal residential energy tax credits ended on 31 December 2025. A great deal of published advice — and a good number of contractors — have not caught up, which makes this the most consequential thing to get right before you spend money.

What's available where you live

Enter your ZIP code. We'll route you to the live, up-to-date programmes for your state and tell you what to watch for. We don't print rebate amounts here — they change too often to trust in print.

ZIP code or choose your state

What each programme was, and what happened to it

Programme	Covered	Status
Section 25C Energy Efficient Home Improvement Credit Internal Revenue Code / One Big Beautiful Bill Act	Formerly 30% of project cost, capped at $2,000 for heat pumps and heat pump water heaters and $3,200 in aggregate.	Expired 2025-12-31
Section 25D Residential Clean Energy Credit Internal Revenue Code / One Big Beautiful Bill Act	Formerly 30% of cost with no cap, covering solar electric, solar water heating, geothermal heat pumps, small wind, fuel cells and battery storage.	Expired 2025-12-31
DOE Home Energy Rebates (HEAR / HOMES) US Department of Energy, administered by state energy offices	Varies by state, income and measure.	Varies by state
Utility and state rebates Individual utilities and state programs	Commonly $300-$2,000 per system; some cold-climate heat pump programs go considerably higher.	Varies by state

Section 25C Energy Efficient Home Improvement Credit

Terminated by the One Big Beautiful Bill Act for property placed in service after December 31, 2025. If your installation was completed on or before that date you can still claim it on the corresponding tax return using IRS Form 5695. There is no federal heat pump tax credit for a 2026 installation. Any site or contractor telling you otherwise is working from stale information.

Source: https://www.pkfod.com/insights/updates-to-energy-credits-under-the-obbba/ · last verified 26 August 2026

Section 25D Residential Clean Energy Credit

Also terminated after December 31, 2025. This is the change that most alters residential solar and battery economics: a 30% uncapped credit disappearing raises effective system cost by roughly 43% relative to the post-credit price buyers were quoted in 2025. Third-party ownership structures (lease and PPA) are financed differently and are worth re-examining as a result.

Source: https://www.pkfod.com/insights/updates-to-energy-credits-under-the-obbba/ · last verified 26 August 2026

DOE Home Energy Rebates (HEAR / HOMES)

These are state-administered and were funded separately from the federal tax credits, so several programs are still running. Availability, funding balance and income limits differ sharply by state, and some programs have paused as allocations ran out. Check your own state energy office before assuming anything, and check it again before you sign a contract.

Source: https://www.dsireusa.org/ · last verified 26 August 2026

Utility and state rebates

With the federal credits gone, utility and state programs are now the main source of incentive money for most households, and they are the ones people most often miss. They frequently require pre-approval before installation, so check eligibility before the contractor orders equipment.

Source: https://www.dsireusa.org/ · last verified 26 August 2026

What the 25D expiry does to solar economics

This is the change with the largest financial consequence, and it is routinely understated. The credit was 30% of gross system cost, uncapped. A $30,000 array cost $21,000 after the credit; it now costs $30,000.

That is not a 30% increase in what you pay. It is a 43% increase, because the credit was calculated off the gross price and you now bear all of it. Any payback figure computed before 2026 — or by a calculator that has not been updated — is wrong by that margin.

Two practical consequences. First, the premium for high-efficiency modules is now fully out of pocket, which strengthens the case for mainstream panels unless your roof area is genuinely constrained. Second, third-party ownership structures are financed differently and are worth re-quoting: the arithmetic that made buying obviously better has changed.

What to actually do now

1. Check your state energy office. The DOE Home Energy Rebates (HEAR and HOMES) were funded separately from the tax credits, and several state programmes are still running. Others have paused as allocations ran out.
2. Check your own utility. With the federal credits gone, utility rebates are the programme most households will actually receive money from, and they are the ones people most often miss.
3. Check the timing requirements. Many programmes require pre-approval before installation. Signing a contract first can disqualify you.
4. Re-run your payback maths. If your decision was based on a post-credit price, redo it. The answer may still be yes — but it should be a decision you make with the current numbers.
5. Treat a contractor who quotes a federal credit as a warning sign. If they are not current on this, consider what else they may not be current on.