If you’ve been thinking about making energy-efficient upgrades to your home, the clock is ticking. Under current law, as updated by the One Big Beautiful Bill Act (OBBBA), homeowners can claim up to $3,200 in tax credits for 2025 but only if the improvements are placed in service by December 31, 2025. That means installed and ready to use, not just ordered or paid for.

What Credits Are Available?

There are two main buckets of savings you’ll want to know about:

1. Up to $1,200 per year for general energy improvements to your primary residence, such as: 
   • Exterior doors (up to $500 total)
     
   • Windows and skylights (up to $600)
     
   • Insulation and air sealing materials
     
   • Qualified furnaces, boilers, water heaters, air conditioners, and electric panels 
2. Up to $2,000 per year for more advanced systems, which may be installed in either your primary or secondary residence: 
   • Electric or natural gas heat pumps
     
   • Heat pump water heaters
     
   • Biomass stoves and boilers
     

In addition, you may also claim a $150 credit for a certified home energy audit, which can help you identify the best upgrades for your home and budget.

Key Details to Keep in Mind

Before you move forward, it’s important to understand how these credits work:

• They are non-refundable credits, meaning they reduce your tax bill but won’t generate a refund if the credit exceeds your liability.
  
• Equipment and materials must meet specific energy-efficiency standards set by the IRS.
  
• The improvements must be installed by December 31, 2025 not just purchased or scheduled.
  
• If you receive rebates or subsidies (for example, from your utility company), you’ll need to subtract those amounts when calculating your eligible credit.
  

These incentives are designed to encourage homeowners to improve efficiency, save on energy bills, and reduce environmental impact. But the window is closing. Unless Congress acts to extend them, 2025 is your final year to take full advantage of these credits.

That means if you’ve been putting off projects like upgrading insulation, installing new windows, or replacing your heating and cooling system with a high-efficiency model, now is the time to act. Not only could you reduce your 2025 tax bill, but you’ll also likely see long-term savings through lower utility costs.

Energy-efficient improvements can be a smart investment for both your wallet and your home’s comfort. With the OBBBA’s deadline looming, consider scheduling your upgrades sooner rather than later to lock in your credits before the opportunity disappears.