Claim them While You Can: Clean Energy Tax Credits Set to Expire
July 2025
If you have been thinking about going solar, buying an electric vehicle, or making your home or business more energy efficient, right now might be a good time to do it. That's because the generous tax incentives that were passed in 2022 as part of the Inflation Reduction Act are being phased out as part of the recent federal One Big Beautiful Bill Act — some more quickly than others. Although it's best to discuss these projects with a tax professional, in general, here is a synopsis of the existing credits and when they'll expire.
For individuals
- Energy Efficient Home Improvement Credits provide a tax credit for household energy efficient improvements, including heat pumps, heat pump hot water heaters, insulation, and more. The value of the credit is 30% of qualified energy efficient improvements up to $1,200 annually ($2,000 for heat pumps and biomass stoves). This credit will now expire December 31, 2025.
- Residential Clean Energy Credit (25D) provides a 30% tax credit for residential wind and solar power, geothermal heating, and battery storage systems. This credit now expires for expenditures made after December 31, 2025.
- Clean Vehicle Credit (45W) provided up to $7,500 for a new electric vehicle and up to $4,000 for the purchase of a used EV (with some restrictions). This credit now expires for vehicles purchased after September 30, 2025.
For governmental agencies, non-profits, and businesses
- Clean Commercial Vehicle Credit provided up to $7,500 back for qualifying electric vehicles and up to $40,000 for certain duty vehicles. This credit will expire December 31, 2025.
- Alternative Fuel Vehicle Refueling Property Credit provides a credit for EV charging stations and storage for clean-burning fuel for personal or commercial use if located within certain census tracts. This credit now expires June 30, 2026.
- Energy Efficient Commercial Buildings Credit (179D) — New construction or improvements to existing commercial buildings are eligible for this tax deduction if energy usage intensity can be demonstrated to be reduced by at least 25% below certain baselines. While not eligible for direct pay, buildings owned by governments and non-profits can be eligible if the tax deduction is taken by the designer/contractor and passed through. This credit now expires for properties whose construction begins after June 30, 2026.
- Clean Electricity Production Tax Credit — A technology-neutral, emissions-based per kilowatt-hour (kWh) tax credit for electricity generated by solar and other qualifying technologies for the first 10 years of a system's operation. This credit now expires for wind and solar projects placed in service after December 31, 2027.
- Clean Electricity Investment Tax Credit — Eligible project types under the credit include solar, geothermal heat pumps, small wind turbines, combined heat and power systems, microgrids, and energy storage (battery) systems. The credit now expires for wind and solar property placed in service after December 31, 2027. Energy storage facilities remain eligible for the credit through 2032.