Home Energy Tax Credits: How To Save Money While Upgrading Smart
Making your home more energy efficient is a smart investment—for your wallet, your comfort, and the planet. And thanks to new federal tax credits, it’s also more affordable than ever.
At Corken + Company, we help clients navigate home upgrades that make long-term sense, whether you’re improving your personal residence or preparing a property for sale. If you’re considering solar panels, efficient HVAC systems, or better insulation, here’s what you need to know about 2025’s energy tax credits—and how to take advantage of them.
What Are Home Energy Tax Credits?
Under the Inflation Reduction Act, homeowners can now receive federal tax credits for certain energy-efficient home improvements made through 2032. These credits help offset the cost of upgrades that reduce energy usage, lower utility bills, and support sustainable living.
That means more money stays in your pocket—while your home becomes more comfortable and marketable.
How Much Can You Save?
There are two main tax credit programs homeowners should know:
1. Energy Efficient Home Improvement Credit (25C)
Covers 30% of eligible project costs, with annual limits depending on the type of upgrade.
Highlights include:
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Up to $2,000 for heat pumps and heat pump water heaters
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Up to $600 each for windows, doors, or central AC
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Up to $150 for a home energy audit
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Up to $1,200/year total for certain upgrades combined
2. Residential Clean Energy Credit (25D)
Applies to renewable energy systems like solar and geothermal, offering a 30% credit for qualifying costs.
This includes:
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Solar electric (panels)
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Solar water heating
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Geothermal heat pumps
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Battery storage systems (like Tesla Powerwall)
Unlike the 25C credit, there’s no annual cap for this category.
Which Upgrades Qualify?
Not every energy-efficient product or system qualifies, so it’s important to work with licensed contractors and choose certified equipment. Look for upgrades that meet ENERGY STAR® or other federal efficiency standards.
Common qualifying projects include:
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Windows and exterior doors with energy-efficient ratings
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Insulation and air sealing for attics, walls, and crawlspaces
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Heat pump HVAC systems and electric panel upgrades
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Smart thermostats and high-efficiency furnaces
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Solar panels and geothermal systems
Before beginning any project, confirm eligibility through your contractor or a licensed tax professional.
How To Claim Your Credit
After completing your upgrades:
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Keep all receipts and documentation
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Ensure product models and contractors meet federal criteria
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File IRS Form 5695 with your annual tax return
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Work with a tax advisor to ensure correct reporting and maximum savings
If you’re planning multiple upgrades, spread them over a few years to stay within annual limits and claim credits year after year.
Why This Matters for Buyers and Sellers
Energy-efficient homes aren’t just more comfortable—they’re more marketable. Buyers are increasingly looking for homes with lower operating costs and modern systems. Highlighting tax-credit-eligible upgrades in your listing can make your home stand out.
For sellers:
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Energy upgrades offer a high return on investment when paired with smart marketing
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Homes with solar or updated mechanical systems often sell faster and for more
For buyers:
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Purchasing a home that’s already upgraded means less maintenance and lower bills
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You may also qualify for certain credits if you install new systems after move-in
Let Corken + Company Help You Maximize the Benefits
We work with homeowners, buyers, and investors across Colorado to identify improvements that add long-term value and maximize savings. Whether you’re updating a primary residence, listing a property, or building out your investment portfolio, we help you take advantage of every opportunity.
Need referrals to energy-efficient contractors or advice on where to start? We’ve got you covered.
Call 303-858-8003 or visit www.corken.co to connect with a broker and build your energy-smart home plan today.
