Federal energy credits have helped households and businesses save on upgrades that promote efficiency and lower costs. With the Big Beautiful Bill moving forward, those tax credits are expiring. This change may feel discouraging, but you still have options.
At A-1 Heating, Air Conditioning & Electric, we continue to offer specials to keep projects affordable, and we can guide you through the local energy efficiency program. Reach out today to begin your heating, cooling, indoor air quality, or electrical upgrades while opportunities are available.
What Federal Energy Credits Have Offered
For a long time, federal energy credits have been a wonderful tool for property owners. They acted as a financial thank you for choosing systems that use less energy. By installing qualifying equipment, you could directly lower your tax bill at the end of the year.
These credits made it easier for you to invest in high-quality heating and cooling systems, which lowered your monthly utility bills and contributed to a healthier environment. Ultimately, these credits make new, better equipment more accessible for many families and businesses.
How the Big Beautiful Bill Brings Change
The Big Beautiful Bill reshapes the way incentives are distributed at the federal level. Energy credits that once supported households and companies for investing in efficient HVAC equipment are being phased out and scheduled to expire at the end of the year.
While the bill emphasizes other national priorities, it leaves many property owners wondering how to manage upgrades without that extra financial support. For those who still want to invest in energy improvements, timing becomes important. Acting soon could help you claim remaining benefits before they vanish.
The Impact on Homeowners
Residential Energy Tax Credits (25C)
The 25C credit historically covered a wide range of energy-efficient home improvements, including heating and cooling equipment, water heaters, and building envelope upgrades. It allowed homeowners to claim up to specific dollar amounts for qualifying improvements.
Under the new legislation, this credit is subject to significant changes in both scope and availability. Some categories of equipment that previously qualified may no longer be eligible, while others may have reduced credit amounts or stricter efficiency requirements. Please note that any new equipment has to be installed and placed in service by December 31, 2025.
Residential Clean Energy Property Credit (25D)
The 25D credit primarily focuses on renewable energy systems, such as solar panels, solar water heaters, and geothermal heat pumps. This credit has been particularly generous, often covering 26-30% of system costs.
Changes to this program affect the percentage of costs covered and may modify the types of systems that qualify. For homeowners interested in renewable energy solutions, timing becomes crucial to maximize available benefits, as systems must be installed and operational by December 31, 2025, to receive the credit.
Effects on Commercial Businesses
Energy Efficient Home Credit (45L)
For builders, this credit remains a valuable tool to make energy-efficient construction more competitive in the marketplace. It provides substantial incentives ranging from $2,500 to $5,000 per qualifying home that meets ENERGY STAR certification or DOE Zero Energy Ready Home standards.
However, time is a factor with this program: qualifying homes must be sold or leased by June 30, 2026, to be eligible for the credit.
Energy Efficient Commercial Buildings Deduction (179D)
Good news for commercial property owners: the 179D deduction remains available for qualifying energy efficiency improvements. Business owners can still claim valuable deductions when they install systems that achieve at least a 25% reduction in their building’s energy consumption.
Save on Upgrades: Call A-1 to Start Your Project!
The time to benefit from these specific programs is quickly running out. So, if you have been considering a new heating or cooling system, acting now is the best way to take advantage of any remaining incentives.
A-1 Heating, Air Conditioning & Electric has been serving Boise and the surrounding communities since 1956, and we’re excited and ready to help you better your home without straining your finances. Give us a call, and let’s talk about how to get your project moving before these credits are gone for good.