This tax credit is effective for products purchased and installed between January 1, 2023, and December 31, 2032.

Overview:

  • Category: Building Envelope Improvements.
    • Credit and cap: 30% up to item cap, counts toward $1,200 shared cap.
    • Items:
      • Exterior doors, $250 per door, up to $500.
      • Windows/skylights, Up to $600.
      • Insulation & air sealing materials/systems, no item cap.
    • Second Home Allowed? No.
    • Renters Eligible? No.
  • Category: Energy-Efficient Equipment.
    • Credit %: 30% up to item cap, counts toward $1,200 shared cap.
    • Items:
      • Central air conditioners, up to $600.
      • Natural gas, propane, or oil water heaters up to $600.
      • Natural gas, propane, or oil furnaces or boilers up to $600.
      • Electrical panel, sub-panel, branch circuits, or feeders up to $600.
    • Second Home Allowed? Yes.
    • Renters Eligible? Yes.
  • Category: High-Efficiency Systems.
    • Credit and cap: 30% up to category cap of $2,000.
    • Items:
      • Electric or natural gas heat pumps.
      • Electric or natural gas heat pump water heaters.
      • Biomass stoves or biomass boilers.
    • Second Home Allowed? No.
    • Renters Eligible? No.
  • Category: Home Energy Audit.
    • Renters Eligible? Yes.
    • Second Home Allowed? No.
    • Credit and cap: 30% up to category cap of $150.
    • Item:
      • Home energy audit performed by a qualified auditor.

Residential energy properties.

IRC 25C(d)(2)(A) states:

  • (A) Any of the following which meet or exceed the highest efficiency tier (not including any advanced tier) established by the Consortium for Energy Efficiency which is in effect as of the beginning of the calendar year in which the property is placed in service:

    • (i) An electric or natural gas heat pump water heater.
    • (ii) An electric or natural gas heat pump.
    • (iii) A central air conditioner.
    • (iv) A natural gas, propane, or oil water heater.
    • (v) A natural gas, propane, or oil furnace or hot water boiler.
  • (B) A biomass stove or boiler which …
  • (C) Any oil furnace or hot water boiler which …
  • (D) Any improvement to, or replacement of, a panelboard, sub-panelboard, branch circuits, or feeders which …

Water Heaters (Natural Gas).

  • Tank Volume: Tankless.
    • Level: Tier 2.
    • UEF: ≥ 0.95 (Energy Star Version 5.0 Compliance).
  • Tank Volume: > 20 gal and ≤ 55 gal.
    • Level: Tier 2.
    • UEF: ≥ 0.81 (Energy Star Version 5.0 Compliance).
  • Tank Volume: > 55 gal.
    • Level: Tier 2.
    • UEF: ≥ 0.86 (Energy Star Version 5.0 Compliance).

Air Source Heat Pumps.

  • 2025 Split Heat Pumps.
    • Path A.
      • Level: Tier 1.
      • SEER2: ≥ 16.0.
      • EER2: ≥ 9.8.
      • HSPF2: ≥ 8.5.
      • COP at 5°F: ≥ 1.75
      • Capacity Ratio: ≥ 60% at 5°F / 47°F.
    • Path B.
      • Level: Tier 1.
      • SEER2: ≥ 16.0.
      • EER2: ≥ 9.8.
      • HSPF2: ≥ 8.5.
      • COP at 5°F: ≥ 1.75
      • Capacity Ratio: ≥ 45% at 5°F / 47°F.
  • 2025 Packaged Heat Pumps.
    • Level: Tier 1.
    • SEER2: ≥ 15.2.
    • EER2: ≥ 10.0.
    • HSPF2: ≥ 7.2.
    • COP at 5°F: ≥ 1.75
    • Capacity Ratio: ≥ 45% at 5°F / 47°F.
  • 2026 Split Heat Pumps.
    • Path A.
      • Level: Tier 1.
      • SEER2: ≥ 16.0.
      • EER2: ≥ 9.8.
      • HSPF2: ≥ 8.5.
      • COP at 5°F: ≥ 1.75
      • Capacity Ratio: ≥ 60% at 5°F / 47°F.
      • Load Management: AHRI 1380.
    • Path B.
      • Level: Tier 1.
      • SEER2: ≥ 16.0.
      • EER2: ≥ 9.8.
      • HSPF2: ≥ 8.5.
      • COP at 5°F: ≥ 1.75
      • Capacity Ratio: ≥ 50% at 5°F / 47°F.
      • Load Management: AHRI 1380.
  • 2026 Packaged Heat Pumps.
    • Level: Tier 1.
    • SEER2: ≥ 15.2.
    • EER2: ≥ 10.0.
    • HSPF2: ≥ 7.2.
    • COP at 5°F: ≥ 1.75
    • Capacity Ratio: ≥ 45% at 5°F / 47°F.
    • Load Management: AHRI 1380.

Here is a list of Tax Credit Eligible ENERGY STAR Certified Air-Source Heat Pumps.

Central Air Conditioners.

  • 2025 Split Central Air Conditioner
    • Level: Tier 1.
    • SEER2: ≥ 17.0
    • EER2: ≥ 12.0
  • 2025 Packaged Central Air Conditioner
    • Level: Tier 1.
    • SEER2: ≥ 16.0
    • EER2: ≥ 11.5
  • 2026 Split Central Air Conditioner
    • Level: Tier 1.
    • SEER2: ≥ 17.0
    • EER2: ≥ 12.0
    • Load Management: AHRI 1380.
  • 2026 Packaged Central Air Conditioner
    • Level: Tier 1.
    • SEER2: ≥ 16.0
    • EER2: ≥ 11.5
    • Load Management: AHRI 1380.

Here is a list of ENERGY STAR Certified Central Air Conditioners and Air-Source Heat Pumps.

Heat Pump Water Heaters

  • Integrated Heat Pump Water Heaters
    • Level: Tier 1
    • UEF: ≥ 3.30 (Energy Star Version 5.0 Compliance)
  • Split-System Heat Pump Water Heaters
    • Level: Tier 1
    • UEF: ≥ 2.20 (Energy Star Version 5.0 Compliance)
  • 120 Volt, 15 Amp Integrated Heat Pump Water Heaters
    • Level: Tier 1
    • UEF: ≥ 2.20 (Energy Star Version 5.0 Compliance)

Here is a list eligible heat pump water heaters.

Furnaces (Natural Gas, Oil)

ENERGY STAR certified gas furnaces with AFUE ≥ 97% are eligible.

Find qualified furnace

Biomass Stoves/Boilers

Must have a thermal efficiency rating of at least 75% (measured by the higher heating value of the fuel).

Electric Panel Upgrade Tax Credit

Any improvement to, or replacement of, a panelboard, sub-panelboard, branch circuits, or feeders which:

  • is installed in a manner consistent with the National Electric Code,
  • has a load capacity of not less than 200 amps,
  • is installed in conjunction with, and enables the installation and use of:
    • any qualified energy efficiency improvements, or
    • any qualified energy property (heat pump water heater, heat pump, central air conditioner, water heater, furnace or hot water boiler, biomass stove or boiler)