Clean Energy Tax Incentives Are Phasing Out: Act Before These Key Deadlines
The recently passed 2025 Tax and Budget Reconciliation Act accelerates the phase-out of several major clean energy tax incentives originally established under the Inflation Reduction Act (IRA). Homeowners, developers, and environmentally conscious taxpayers should act swiftly to take advantage of these expiring credits.
Here’s what you need to know:
🔹 Residential & Commercial Energy Credits Ending Soon
Several popular credits for energy-efficient improvements to homes and businesses are now set to expire at the end of 2025, significantly shortening the planning window.
Residential Clean Energy Credit
Covers installations like solar panels, battery storage, geothermal systems, small wind turbines, and heat pumps.
⏳ Expires: December 31, 2025 — Systems must be placed in service before this date to qualify for the credit.
Energy-Efficient Home Improvement Credit
Applies to high-efficiency upgrades including windows, doors, insulation, HVAC systems, and water heaters.
⏳ Expires: December 31, 2025 — No credit available for upgrades placed in service after this date, regardless of contract or payment timing.
🔹 Electric Vehicle & EV Infrastructure Credits
Federal tax incentives for EVs and related infrastructure are also being phased out ahead of schedule.
EV Purchase Credits (IRC Sections 30D & 25E)
Covers new and used electric vehicles that meet federal qualifications.
⏳ Expires: September 30, 2025 — Vehicle must be purchased and placed in service by this date to qualify.
EV Charger / Clean Fuel Refueling Credit
Applies to both residential and commercial charging stations and clean fuel infrastructure.
⏳ Expires: June 30, 2026 — No credits will be available after this date.
🔹 Utility-Scale Wind, Solar & Storage (IRA Business Credits)
The business Investment Tax Credit (ITC, §48E) and Production Tax Credit (PTC, §45Y) are being phased out for wind and solar more quickly than initially expected.
Construction must begin within 12 months of enactment of the new legislation.
Projects must be placed in service by December 31, 2027 to remain eligible.
Energy storage remains eligible under original IRA provisions beyond this date.
Tax Planning Highlights
These changes compress the timeline for claiming long-term clean energy incentives, making tax planning more urgent:
✅ Homeowners – Complete energy upgrades before year-end 2025. Consider bundling projects to maximize credits.
✅ EV Buyers & Fleet Owners – Finalize purchases and installations by the 2025 and 2026 deadlines.
✅ Commercial Developers – Begin wind and solar construction promptly to meet 2027 service deadlines.
✅ Clean Fuel Companies – Leverage extended credits through 2029 to plan capital investments.
Need help maximizing these clean energy opportunities?
We can help you assess which projects are worth pursuing, optimize timing for tax credits, and integrate these moves into your broader tax strategy.