Community Voices: Federal energy tax credits expire soon

Transportation and housing represent over 60% of the total carbon footprint of the United States. To help reduce greenhouse gas emissions in both of these areas, the Inflation Reduction Act (IRA) established federal income tax credits for renewables and energy efficient equipment.

If you’re thinking about home upgrades, or purchasing a vehicle, and hoping to take advantage of these tax credits, you’ll need to hurry. Originally available through 2032, in July of 2025 they were scaled back and most now expire at the end of this year.

If you’re shopping for an EV, the $7,500 tax credit for a new EV ($4,000 for a used EV) expires Sep 30 2025—the end of this month! If you want to install an EV charger in your home, you have a little more breathing room; the 30% credit (max $1000) is still available until June 30 2026.

You can receive tax credits amounting to 30% of the cost of new solar PV, battery storage, and geothermal heating systems that are installed by Dec 31 2025.

There’s another category of products (which also must be installed by Dec 31 2025) that have less straightforward rules. The tax credit for each product is 30%, but there is a cap on the maximum credit.

In addition, the sum total of all credits in this category is capped at $3,200. Items include heat pumps ($2,000 max credit), heat pump water heaters ($2,000), weatherization/insulation ($1,200), electrical panel upgrades ($600), and home energy audits ($150) .

Note that these are all “non-refundable” tax credits. You’ll fill out your tax return by next April to determine the amount of income tax owed to the federal government. Then you’ll calculate the sum total of all the IRA credits that you’re eligible for, and subtract that amount from your owed taxes. If the credits add up to more than that tax you owe, they will simply reduce your tax burden to $0, and the remaining credit amount can’t be utilized or carried over to the following year.

In addition to federal tax credits, Focus On Energy has several other incentives available to residents of Wisconsin, which will not expire at the end of this year.

There are instant discounts and rebates worth hundreds of dollars on products and equipment such as high efficiency gas furnaces, heat pumps, insulation, water heaters, solar PV systems, and more.

Larger rebates are available in two other programs that are administered by Focus On Energy.

The Home Owner Managing Energy Savings (HOMES) program helps offset the cost of whole-home energy saving projects. You’ll start by getting an energy audit for your home. If you make recommended changes that are projected to reduce your energy usage by at least 20%, you can get rebates of $1,500 to $10,000 depending on your income and the projected energy savings.

The Home Electrification and Appliance Rebates (HEAR) program is specifically geared toward households earning less than 150% of Area Median Income (AMI). Select an IRA registered contractor to install energy efficient equipment in your home. Households earning less than 80% AMI can receive a rebate amounting to 100% of project costs, up to $14,000. Households earning between 80% and 150% AMI can receive a rebate of 50% of project costs, up to $14,000.

While these two programs are currently available, they too are funded through the IRA, and there is no guarantee that they will remain through their originally intended sunset date of Sep 30 2031.

This fall may well be the best time to make home improvements for some years to come. While navigating these various programs may seem daunting, your contractor will be familiar with them and assist you in taking full advantage of the credits and rebates.