With the introduction of a new federal budget, federal tax incentives that support energy-saving upgrades are going away soon. If you have been considering any of the following products or projects, you may want to act quickly to take advantage of
the additional savings for electric vehicles (EVs), energy-saving home improvements, and solar panels before the deadlines.
In this blog post, we will discuss how you can apply these tax credits, what the rules and restrictions are, and relevant financing options if you want to save money and energy without breaking the bank.
Electric Vehicles (EV): September 30, 2025
The EV Tax Credit, which provides credits for qualifying electric vehicles and plug-in hybrid electric vehicles (PHEV), will only be available until the end of September. If you’ve been considering taking advantage of the benefits of an EV, here are some things to keep in mind:
You must sign a lease or purchase an EV by September 30 to qualify.
The credit applies to both new and pre-owned EVs.
The credit is relevant for fully electric vehicles and plug-in hybrid electric vehicles (PHEV).
It may be applied at the point of vehicle purchase (depending on the dealership) to instantly lower the sticker price by 30% of the vehicle cost, up to these maximums:
Regardless of whether you claim the credits at the point of sale or if you wait to claim them when you are filing taxes, you must file form 8936, Clean Vehicle Credits, with your tax return.
Income limits apply, but you may use your adjusted gross income from the year you purchase the vehicle or the year prior — whichever is less.
While there are a number of EVs and PHEVs that qualify for this credit, there are some specific requirements for your chosen vehicle that should be considered:
New EVs and PHEVs
Must have a battery capacity of at least 7 kilowatt hours
Must be made by a qualified manufacturer
Must undergo final assembly in North America
Must meet critical mineral and battery component requirements
The MSRP of the vehicle cannot exceed $80,000 for SUVs, vans, and pickup trucks or $55,000 for other vehicles
To find out if a new vehicle is eligible for the tax credit, search fueleconomy.gov
Pre-owned EVs and PHEVs
Must have a sale price of $25,000 or less (see the IRS website for inclusions and exclusions
in the sale price)
Must have a model year of at least 2 years earlier than the calendar year that it is bought (anything purchased now would have to be model year 2023 or older)
Must have a battery capacity of at least 7 kilowatt hours
Must buy the vehicle from a dealer
To find out if a pre-owned vehicle is eligible for the tax credit, search fueleconomy.gov
Self-Help Financing: Check out our EV Loans, which include rate discounts and can also include the installation of an EV charger in your home.
Energy-saving Home Improvements: December 31, 2025
The Energy Efficient Home Improvement Credit applies to several energy-efficient
products and services for your home, which include replacing old or broken HVAC systems or other appliances with more efficient options, improving insulation through Energy Star doors and windows, or completing a home energy audit.
You must have the project placed in service by 12/31 to qualify.
The credit provides a tax deduction of 30% of a project, up to a maximum:
The maximums are specified per project, but range from $150 for a home energy audit to $2,000 per year for qualified heat pumps, water heaters, etc.
The item must be produced by a qualified manufacturer.
You may need to subtract subsidies, rebates, or other financial incentives when calculating your credit, since these count as purchase-price adjustments.
The credit is nonrefundable, so you can’t get back more credit than you owe in taxes
To claim the credit, you must file Form 5695, Residential Energy Credits Part II with your 2025 tax return.
Here are some of the improvements that qualify to claim this tax credit:
Building envelope components – they must have an expected lifespan of 5 years and be purchased new. Labor costs don’t qualify:
Exterior doors – Energy Star
Exterior windows and skylights – Energy Star
Insulation and air sealing materials or systems – must meet International Energy Conservation Code (IECC) standards
Home energy audits – this is an inspection that identifies cost-effective energy efficiency improvements and estimates relevant energy and cost savings. This must be conducted by a qualified home energy auditor with appropriate
certification.
Residential energy property – they must meet the Consortium for Energy Efficiency (CEE) highest efficiency tier, be purchased new, and the costs may include labor for installation:
Central air conditioners
Natural gas, propane, or oil water heaters, furnaces, and hot water boilers
Electric or natural gas heat pumps or heat pump water heaters
Biomass stoves and boilers
Self-Help Financing: Energy Saver Loans can be used for almost anything that reduces home energy use. Common categories include home heating and cooling, water heaters, and windows. 30% of the loan amount can also be used for non-energy efficiency projects that improve comfort such
as roof repairs. Additional rebates may be available, depending on the location.
Solar Panels: December 31, 2025
The Residential Clean Energy Credit that applies to new solar panels and other
clean energy property as well as their installation costs will be going away at the end of 2025. It’s important to note:
You must have your solar panel system or other clean energy property installed by 12/31 to qualify.
Solar panel systems can take 2.5-4 months to fully install, so you should start the process as soon as possible if you want to take advantage of the credit.
The credit equals 30% of the costs of new, qualified clean energy property.
This includes labor costs for onsite preparation, assembly or original installation of the property, and piping or wiring to connect it to the home.
There are no dollar limits, except for fuel cell property
You may need to subtract subsidies, rebates, or other financial incentives when calculating your credit, since these count as purchase-price adjustments.
The credit is nonrefundable, so you can’t get back more credit than you owe in taxes.
To claim the credit, you must file Form 5695, Residential Energy Credits with your 2025 tax return.
While solar panels are the most prominent use for this credit, here is a list of the clean energy property that qualifies (all must be purchased new):
Solar electric panels
Solar water heaters – certified by the Solar Rating Certification Corporation or a comparable entity
Wind turbines
Geothermal heat pumps – Energy Star
Fuel cells
Battery storage technology – capacity of at least 3 kilowatt hours
Self-Help Financing: Our Solar Loans can be used to finance a solar panel system, including labor, solar panels, electrical panel upgrades, racking, and battery storage. You may select your own contractor, but they must be vetted by our Green Lending Team prior to loan approval.
A list of preapproved contractors can also be requested from our loan officers.
At Self-Help, our goal is to help you take advantage of economic opportunities. Saving energy can sometimes be an investment upfront, but there are many home upgrades that pay off and a number of financial benefits with switching to an EV. If you have been considering making any of these upgrades, now is the time! And if you need affordable, responsible
financing to help you maximize your savings in the long run, we are always here to help.