Unlocking the Benefits of Residential and Commercial Clean Energy Tax Credits

June 26, 2025 | by Atherton & Associates, LLP

Residential and Commercial Clean Energy Tax Credits: Key Highlights

June 26, 2025
From the Office of Bhavshriya Saini, Tax Associate

Clean energy tax credits are transforming how Americans invest in their homes and businesses, offering significant savings while encouraging a shift toward sustainability.

Residential Clean Energy Credit

• Homeowners can claim 30% of the costs for installing qualifying clean energy systems.
• Qualifying systems can include solar panels, wind turbines, geothermal heat pumps, fuel cells, and battery storage, on their primary or secondary U.S. residences.
• The credit applies to systems installed from 2022 through 2032, with a gradual phase-down starting in 2033.
• There is no annual or lifetime dollar limit for most property types, and unused credits can be carried forward to future tax years.

Energy Efficient Home Improvement Credit

• Homeowners can claim 30% of the cost of qualifying improvements up to $3,200 annually.
• Qualifying improvements can include insulation, air sealing, heat pumps, energy-efficient windows, doors, and home energy audits.
• This credit is available through 2032, making it easier to spread out projects and maximize savings year after year.

Clean Vehicle Tax Credit

• This credit incentivizes the purchase of new and certain used electric vehicles (EVs) and plug-in hybrids.
• Qualifying buyers can receive a federal tax credit of up to $7,500 for new EVs, depending on the vehicle’s battery capacity and manufacturer.
• This credit helps offset the higher upfront cost of clean vehicles, making sustainable transportation more accessible.

Business Clean Energy Tax Credits: ITC and PTC

• Investment Tax Credit (ITC): This credit allows businesses to deduct a percentage of the cost of installing renewable energy systems, such as solar or wind, from their federal taxes. The ITC remains at 30% for systems placed in service through 2032.
• Production Tax Credit (PTC): The PTC offers a per-kilowatt-hour tax credit for electricity generated by qualifying renewable sources, such as wind or biomass, during the first ten years of operation.

Action Item

Whether you’re a homeowner looking to upgrade your property or a business seeking to reduce energy costs, understanding these credits-and how to claim them-can make a real difference in your tax strategy. Please contact your tax advisor to identify and maximize these opportunities, ensuring you get the most from available incentives.