If you’ve been thinking about making your home more energy efficient, there’s never been a better time to act. Two powerful federal tax credits—the 25C Energy Efficient Home Improvement Credit and the 25D Residential Clean Energy Credit—are available now, but both will expire on December 31, 2025. Combined with rebates from PSO, these incentives create an opportunity to “double down” on savings and lower your energy costs for years to come.
What is the 25C Energy Efficient Home Improvement Credit?
The 25C credit helps homeowners offset the cost of upgrades that improve their home’s efficiency and comfort. Qualifying improvements include:
- Air Sealing
- Insulation
- Central Air Conditioners
- Heat Pumps
- Heat Pump Water Heaters
Homeowners can claim 30% of the project cost, up to annual limits, making upgrades more affordable and accelerating your return on investment.
What is the 25D Residential Clean Energy Credit?
The 25D credit supports homeowners who install geothermal heat pumps and other clean energy systems. Like the 25C credit, you can also claim 30% of the total project cost, significantly reducing the upfront expense of energy-efficient investments that continue to pay off through lower utility bills and long-term home value.
Why You Should Act Now.
The 25C and 25D tax credits are available through the end of 2025. While that may sound like plenty of time, larger projects like heat pump installations may take contractor scheduling and permitting—steps that can add to your timeline. So, get started now by contacting a PSO participating service provider. Waiting could mean missing out on thousands of dollars in federal savings.
Acting now also means you can take advantage of the many money-saving rebates from PSO. When you pair qualifying rebates with the 25C or 25D tax credits, the combined savings can be substantial. These stackable incentives make high-efficiency upgrades more affordable than ever.