At the end of September, the first federal clean energy tax credit, which applies to the purchase of an electric vehicle, will be phased out. That’s thanks to the One Big Beautiful Bill Act, passed by Congress earlier this summer.
The act will, among other things, prematurely end longstanding federal home energy tax credits that have been instrumental in helping Americans lower their energy bills—and go green in the process.
“What that bill did was phase out a handful of tax credits that for years have helped families and households across the country afford home upgrades or vehicle upgrades that have reduced their energy bills, and made their homes more efficient and safer by allowing them to basically transition to newer and more modern appliances,” says Zach Pierce, head of policy at Rewiring America, an electrification nonprofit. The organization recently created a hub where homeowners can learn more about the expiring federal tax credits, explore additional state, local, and utility incentives, and find contractors to help with installation. “Preemptively phasing out these credits, many of which were enacted under a Republican-led Congress and previously extended under the Trump Administration, is in many ways a self-inflicted setback that takes away this affordable home upgrade option for many families across the country.”
The benefits of clean energy tax credits are clear, say experts. “By taking advantage of these credits, the average household cuts their annual energy bills by over 70%, which for the average home is $2,200 a year,” says Pierce.
Though the credits are being phased out, there is still time left if you are looking to purchase an electric vehicle, install solar power, or switch to a heat pump. Here’s what to know:
Electric vehicle credits
The first credits to expire will be those for electric vehicles. The government currently offers two credits: up to $7,500 for new vehicles and $4,000 for used.
“This is not a small amount of savings,” says Pierce.
The credit will expire on September 30. That means the vehicle must be purchased on or before that date so that you can claim it on your 2025 tax return. However, the EV credits do have some restrictions on things like qualifying incomes, vehicle prices, and qualifying models. The IRS has guidelines that you should consult before you purchase.
Solar power installation credits
A tax credit for solar installation was originally supposed to go through 2032, but will now expire on December 31. The credit offers an uncapped 30% off eligible costs—including labor costs and some qualifying piping and wiring—for homeowners purchasing and installing solar panels.
You must purchase and install the panels before the end of the year in order to apply for the credit with your 2025 tax return. “My recommendation would be to start getting some quotes now and pick an installer so that you can move forward with the project in time to get that 30% tax credit,” says Lisa Frank, executive director of the nonprofit Environment America.
Energy Efficiency Home Improvement credits
The Energy Efficiency Home Improvement Credit covers 30% of certain qualified expenses and improvements that contribute to energy efficiency—such as new insulation or heating systems—and is set to expire on Dec. 31. The credit can be used for projects like updating your home heating and cooling system or switching to a heat pump.
“Under this credit, you can also do other energy efficiency upgrades, like replacing your windows and doors or getting an energy audit,” says Pierce. An energy audit, often performed by certified assessors, tells you how efficiently (or not) your home is using energy and what the best improvements to make would be, such as installing more insulation to keep heat from leaking out of the home.
The maximum value of the credit for those improvements is $1,200.
EV charger installation credits
If you own an electric vehicle and have been looking to install a charger in your home, you have a bit more time to take action. One federal tax credit offers $1,000 off for EV chargers installed before June 30, 2026.
And even if you aren’t able to take advantage of the tax credits before they expire, experts say that it’s still worth looking into these home upgrades. There are a number of state and local rebates that are not going away, and home electrification can still save you money in the long run, even without the federal tax credits.
“The expiration of these tax credits is a really important prompt for folks to take a closer look at how they can take advantage of these upgrades,” says Pierce. “But even if folks do miss the deadline and they aren’t able to complete the upgrades before the end of the calendar year, they should not give up. They should continue to explore if and how these upgrades can benefit them.”
The post How to Use Federal Clean Energy Tax Credits Before They Disappear appeared first on TIME.
