New Law at a Glance: Key Changes to Energy-Efficient Tax Credits
- Cherie Sayban
- Sep 2
- 4 min read
Updated: 2 days ago
In July 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law. It accelerates the expiration of several energy-related tax credits previously extended under the Inflation Reduction Act (IRA). Here's what individuals need to know:
Energy Efficient Home Improvement Credit (§ 25C) – Expired on December 31, 2025. Homeowners will lose eligibility for the 30% credit (up to $1,200 for envelope improvements and up to $2,000 for heat pumps, water heaters, biomass equipment) if placed in service after 2025. blog.ssb-cpa.com IRS Aldrich Wealth TurboTax Nerd Wallet
Residential Clean Energy Credit (§ 25D) – Also ended on December 31, 2025. Includes solar panels, solar water heaters, geothermal systems, fuel cells, and battery storage. Berkowitz Pollack Brant Advisors + CPAs IRSPKF O'Connor Davies National Association of Home Builders TurboTax The Week
Clean Vehicle Credits – New vehicle credits (up to $7,500) and used EV credits (up to $4,000) now expire on September 30, 2025. Berkowitz Pollack Brant Advisors + CPAs IRS DWD CPA The Week
EV Charging Station Credit (§ 30C) – The 30% credit for installing EV charging equipment (up to $1,000 per item) persists until June 30, 2026. Berkowitz Pollack Brant Advisors + CPAs PKF O'Connor Davies DWD CPA
Other Related Deadlines:
New Energy-Efficient Home Credit (§ 45L) – eligibility ends June 30, 2026. National Association of Home Builders IRS
Commercial Energy Deduction (§ 179D) – ends June 30, 2026. National Association of Home Builders PKF O'Connor Davies
Broadly speaking, many energy-efficiency and clean energy credits are disappearing much sooner than expected. Investopedia Kiplinger The Week
CPA Advice for Individuals: What to Do Now
As your tax professional, here is a strategic roadmap to make the most of remaining opportunities:
1. Act Immediately on Home Improvement and Clean Energy Projects
To qualify for the § 25C and § 25D credits, ensure installations are completed and placed into service by December 31, 2025. This includes insulation, energy-efficient windows/doors, heat pumps, solar systems, and battery storage. PKF O'Connor Davies IRS Kiplinger The Week
Begin planning now—contractors may face high demand, possibly delaying installations. Aldrich Wealth The Week
2. EV and Used EV Purchases—Act Before September 2025
To secure the EV tax credits, you must acquire (enter contract + payment) by September 30, 2025. But remember, to claim the credit, the vehicle must also be placed in service—i.e., delivered to you. IRS
Ensure compliance with income thresholds and manufacturer sourcing rules to confirm eligibility. Berkowitz Pollack Brant Advisors + CPAs PKF O'Connor Davies Wikipedia
3. EV Charger Installations—Deadline June 2026
If you're installing a home EV charger, the § 30C credit (30% up to $1,000) remains available until June 30, 2026. Still, early projects help avoid bottlenecks. PKF O'Connor Davies DWD CPA
4. Document Everything Thoroughly
Keep careful records:
Proper documentation ensures smooth IRS filing and defenses in case of audit.
5. Use IRS Form 5695
For § 25C and § 25D credits, complete and attach Form 5695, Residential Energy Credits, to your tax return. Nerd Wallet
The § 25C credit is nonrefundable—meaning it can’t produce a refund beyond your tax liability—so tax planning is crucial.
6. Evaluate State and Local Incentives
Although federal credits are phasing out, many states and utility providers still offer rebates or incentives for energy-efficient investments. Check what's available before pursuing major projects.
Summary Table of Key Deadlines
Credit / Incentive | Deadline | What You Must Do |
§ 25C – Home Improvement | December 31, 2025 | Complete and place energy-efficient improvements |
§ 25D – Residential Clean Energy | December 31, 2025 | Install solar, storage, geothermal, etc. |
EV Tax Credit (new and used) | September 30, 2025 | Acquire vehicle and place in service |
EV Charging Station Credit (§ 30C) | June 30, 2026 | Install charging equipment |
§ 45L – New Energy-Efficient Home Credit | June 30, 2026 | Acquire newly built qualified energy-efficient home |
Final CPA Words of Wisdom
This is a pivotal moment for homeowners and clean energy investors. The accelerated sunset of these tax credits creates tight windows of opportunity. As your CPA, I'd advise:
Begin energy projects this fall to meet year-end thresholds.
Negotiate delivery and installation terms that guarantee placement before deadlines.
Bundle improvements with audits to ensure returns are maximized (and plugged into § 25C).
Track installation and acquisition dates meticulously to substantiate claims.
If you'd like assistance estimating the tax savings or navigating eligibility requirements, I'm just a message away.
About the Author
Cherie Sayban is a certified public accountant. She has over 25+ years of experience in Finance, Accounting and Bookkeeping.
Cherie Sayban CPA provides various financial and accounting solutions to small and mid-size businesses. Our portfolio includes: tax preparation, payroll preparation, accounts receivable and payables, general ledger, and QuickBooks . Our bookkeeping workshops are offered both in-person and virtually.
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