The Home Energy Tax Credits Ended: What to Tell Customers

Through the end of 2025, a homeowner could take a federal tax credit of 30% of the qualifying costs of heat pumps, insulation, windows, solar systems and more, within the credits' limits. For any job installed today, "you get 30% back" is wrong. Public Law 119-21 of July 4, 2025, which the IRS notes is commonly known as the One, Big, Beautiful Bill, ended both federal home energy credits for work after 2025. Customers still ask, and some have read about the credit in a brochure or on an old web page. Here is what ended, what may still be available, and what you can say without making a claim you cannot stand behind.

What ended, and when

Two credits are gone. Section 70505 of the law ended the Energy Efficient Home Improvement Credit (section 25C of the tax code) for property "placed in service after December 31, 2025." Section 70506 ended the Residential Clean Energy Credit (section 25D) "with respect to any expenditures made after December 31, 2025." The IRS confirmed both dates in its August 2025 questions and answers on the law (FS-2025-05).

One detail catches people out. For the solar credit, paying early did not help. The IRS says that under section 25D(e)(8)(A) an expenditure "is treated as made when the original installation of the item is completed," so a system paid for in December 2025 but finished in January 2026 gets no credit. For the home improvement credit, the test is when the property was placed in service, which the IRS ties to installation: the credit is claimed "for the tax year when the property is installed, not merely purchased."

The customer whose job was finished in 2025

A job installed in 2025 belonged on the customer's 2025 return, on Form 5695. For home improvement property placed in service in 2025, the IRS adds a condition: no credit unless the item was made by a qualified manufacturer and the taxpayer reports its Qualified Manufacturer Identification Number (QMID). Insulation and air sealing materials are the exception. If a 2025 customer asks you for paperwork, give them the invoice with the install date, the make and model of each item, and the QMID where the manufacturer provides one. What they can claim is a question for their tax preparer, not for you.

What a customer may still get

The federal credits are gone, but the customer's question ("is there any help paying for this?") still has answers in many places. They are just local, and they change.

• State home energy rebates. The Department of Energy's Home Energy Rebates are paid through programs run by states, territories and Tribes: one for whole-home upgrades based on modeled energy savings of at least 20%, up to $8,000 per household, and one for efficient electric equipment and upgrades, up to $14,000, which can be given at the point of sale through contractors. The DOE says these rebates "are now available in select states" and tells people to contact their State or Territory Energy Office for status and eligibility.
• Local rebates and offers. The EPA's ENERGY STAR Rebate Finder looks up "special offers and rebates from ENERGY STAR partners" on certified products by ZIP code. Ask your own utility what it runs, too, and keep the answer on file for the customers who ask.
• State tax credits. Some states have their own. New York, for one, offers a credit of 25% of qualified solar energy system equipment expenditures, limited to $5,000, according to its tax department. Check your own state's tax agency before you mention one.

If your state runs a rebate that is paid through contractors, find out from the State Energy Office how a contractor takes part before you promise a customer anything about it.

What you may say, and what you should stop saying

The Federal Trade Commission Act makes "unfair or deceptive acts or practices in or affecting commerce" unlawful (15 U.S.C. 45(a)(1)). The FTC's advertising guide for small businesses puts the standard simply: advertising "must be truthful and non-deceptive," advertisers "must have evidence to back up their claims," and an ad is deceptive if it is likely to mislead consumers acting reasonably and the point is "material," meaning important to the decision to buy. The FTC looks at implied claims as well as express ones. A tax credit is about as material as a sales point gets.

Lines to retire now, wherever they appear:

• "Qualifies for the 30% federal tax credit," or a credit shown as a minus line on an estimate.
• "Tax-credit eligible" or "save with federal incentives," which imply the same thing without saying it.
• A price shown "after incentives" that assumes a credit or a rebate the customer may not get.
• Any promise of a rebate amount before the customer's eligibility under the program's rules is known.

Lines you can stand behind:

• "The federal tax credits for heat pumps and solar ended for systems installed after December 31, 2025."
• "Our price is the price before any rebate. Here is the link to your state's program and your utility's offers so you can check what you qualify for."
• "For anything about your taxes, your tax preparer is the right person to ask."

A worked example

Say an HVAC contractor still uses a heat pump estimate template from 2024 with a line reading "Estimated federal tax credit: −$2,000" and a bottom line net of it. On a system installed this winter, that line is false, and the net price is a price the customer will never pay. The fix takes an afternoon: delete the credit line, show the installed price, and add a short note naming the state energy office program and the utility rebate page with "eligibility set by the program." If the template also showed a monthly payment, the financing rules apply to that too; see advertising financing.

The places the old line hides

• Website service pages and old blog posts about heat pumps, insulation, windows and doors, and solar.
• Estimate and proposal templates, and the price sheets your salespeople carry.
• Manufacturer brochures and spec sheets printed before the law changed.
• Posts on your Google profile and social pages, yard signs and truck graphics.
• The phone script, and whatever your crew says when a homeowner asks in the driveway.

Each trade has its own version of the sale: our pages on HVAC, insulation, windows and doors and solar show how those jobs can be priced on your own website. For insulation, what you must tell a customer about R-value is a separate set of rules, covered in the FTC's R-value rule.

General information, not legal or tax advice. Rules change and vary by state; check with the agency named above or a professional for your situation.