Federal Clean Energy Tax Credits Are Ending Soon
The clock is ticking on some of the most important federal clean energy tax credits that many families have relied on for years. These incentives, which have helped households lower their energy bills and move toward greener technologies, are now being phased out because of the One Big Beautiful Bill Act, passed by Congress earlier this summer. For many people, this feels like a big step backward, since these credits have been a reliable way to make clean energy more affordable.
Let’s start with what’s going away first: electric vehicle tax credits. Right now, the government offers up to $7,500 off the purchase of a new EV and $4,000 off a used one. That’s not a small discount—it can make the difference between someone deciding to go electric or not. But these credits will expire on September 30. To qualify, a vehicle must be purchased on or before that date so it can still be claimed on your 2025 tax return. Of course, there are some restrictions on income, vehicle price, and which models qualify, so buyers need to check IRS guidelines before jumping in.
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Next up is solar power. A generous credit of 30% off installation costs, including labor and certain materials, was originally supposed to last until 2032. Instead, it will now end on December 31 of this year. That means anyone hoping to take advantage of it must purchase and install solar panels before the year is over. Experts recommend starting the process soon—getting quotes, choosing an installer, and scheduling work—because demand will likely surge as the deadline approaches.
Home energy efficiency improvements are also affected. A federal credit that covers 30% of qualified upgrades—like insulation, heat pumps, new windows, or energy audits—will disappear at the end of December. This credit can save households up to $1,200 on projects that make homes more efficient and comfortable. Even something as simple as replacing drafty doors or upgrading your heating and cooling system can qualify.
One credit with a little more time left is for EV chargers. If you’re planning to install a charger at home, you can still get up to $1,000 back, as long as it’s installed before June 30, 2026. That gives EV owners a bit of breathing room.
Experts stress that even with the federal tax credits ending, families shouldn’t give up on these upgrades. Many state and local incentives remain in place, and home electrification continues to save money in the long run. In fact, the average household that uses these upgrades has been shown to cut annual energy bills by over 70%, saving about $2,200 per year.
So, while these federal incentives are being phased out, there is still time left to act. If you’ve been considering solar, buying an EV, or making your home more efficient, this may be the moment to move forward before those savings vanish.
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