If you’ve been thinking about making your home greener, more energy-efficient, and more comfortable, 2025 is the year to act. Thanks to the One Big Beautiful Bill Act (OBBBA), homeowners can claim up to $3,200 in tax credits for energy-efficient home improvements but only if those improvements are placed in service on or before December 31, 2025.
Here’s what you need to know to maximize your savings before the year ends.
What Tax Credits Are Available?
There are two main credits you can take advantage of:
- Up to $1,200 for Basic Energy Improvements
This credit applies to your primary residence and includes:
- Exterior doors (up to $500 total)
- Windows and skylights (up to $600 total)
- Insulation and air-sealing materials
- Energy-efficient furnaces, boilers, water heaters, air conditioners, and electric panels
- Up to $2,000 for Advanced Energy Systems
This credit is available for either your main or second home and covers:
- Electric or natural gas heat pumps
- Electric or natural gas heat pump water heaters
- Biomass stoves and boilers
Bonus: Home Energy Audit Credit
A $150 credit is also available if you complete a certified home energy audit, helping you identify the most cost-effective upgrades for your home.
Important Details to Keep in Mind
- These are non-refundable credits, meaning they reduce your tax bill but won’t generate a refund.
- Upgrades must meet specific energy-efficiency standards and be installed (not just purchased) by December 31, 2025.
- Any subsidies or rebates from utilities must be subtracted from the cost basis used to calculate your credit.
If you’ve been considering upgrades such as new windows, insulation, or high-efficiency heating systems, now is the time. Waiting until 2026 means losing out on the 2025 tax credits, so schedule your projects soon to secure the maximum benefit.
Taking advantage of these credits not only reduces your tax bill, but it also makes your home more comfortable, efficient, and valuable, a win-win for your finances and your lifestyle.