Energy Tax Credits 2025–2026 for Idaho Homeowners
Public Law 119-21 terminated the federal 25C (Energy Efficient Home Improvement) and 25D (Residential Clean Energy) credits for property placed in service after December 31, 2025. Homeowners installing eligible equipment in 2026 CANNOT claim these credits. Here is what still exists and what changed.
Critical: 25C and 25D terminated for post-2025 installations
Public Law 119-21 terminated both federal residential energy credits for property placed in service AFTER December 31, 2025. A 2026 Idaho remodel installing heat pumps, solar, insulation, energy-efficient windows, or other previously-qualifying equipment cannot claim 25C or 25D on the 2026 tax return. Verified against irs.gov 2026-09-25. Confirm with your CPA.
Quick answer
P.L. 119-21 terminated both the Section 25C (Energy Efficient Home Improvement Credit) AND Section 25D (Residential Clean Energy Credit) for property placed in service after December 31, 2025. Verified against irs.gov 2026-09-25. A homeowner installing heat pumps, solar, insulation, or energy-efficient windows in 2026 CANNOT claim these federal credits. What still exists for 2026 Idaho homeowners: utility rebate programs (Idaho Power, Intermountain Gas, local cooperatives — verify current programs with your utility) and manufacturer rebates. Iron Crest is not a tax preparer — confirm your specific 2025 vs 2026 filing with your CPA.
Quick answer
No — not the Section 25C or 25D credits. Public Law 119-21 terminated both the Energy Efficient Home Improvement Credit (IRC § 25C) AND the Residential Clean Energy Credit (IRC § 25D) for property placed in service after December 31, 2025.
For 2025 installations (still claimable on the 2025 return): the two credits covered these categories. After Dec 31, 2025, none of this applies to new installations.
§ 25C (through 2025)
Annual cap: $1,200 (general) + $2,000 (heat pumps)
- Insulation and air-sealing materials
- Exterior doors ($250 each / $500 total)
- Energy-efficient windows and skylights ($600 total)
- Home energy audits ($150)
- Qualified heat pumps and heat-pump water heaters
- Biomass stoves and boilers
§ 25D (through 2025)
30% of cost, no annual cap
- Solar photovoltaic (PV) panels
- Solar water heating systems
- Geothermal heat pumps
- Small wind turbines
- Battery storage systems (3 kWh+)
- Fuel cell systems
Source: irs.gov Energy Efficient Home Improvement Credit page (verified 2026-09-25). These items are historical reference — 25C and 25D no longer apply to property placed in service after December 31, 2025.
Can I claim federal energy tax credits on my 2026 Idaho remodel?
No — not the Section 25C or 25D credits. Public Law 119-21 terminated both the Energy Efficient Home Improvement Credit (IRC § 25C) AND the Residential Clean Energy Credit (IRC § 25D) for property placed in service after December 31, 2025. Per the current IRS page on the 25C credit (irs.gov, verified 2026-09-25): 'You can claim the credit for improvements made through December 31, 2025.' A homeowner who installed qualifying heat pump, insulation, energy-efficient windows, or solar panels in 2025 can still claim the credit on their 2025 return. A homeowner installing the same equipment in 2026 or later cannot claim 25C or 25D. This is a hard cutoff.
What were the 25C and 25D credits, and what did they cover?
IRC § 25C — the Energy Efficient Home Improvement Credit — provided a federal tax credit for qualifying home energy improvements: $1,200 per year annual cap for insulation, air-sealing, exterior doors ($250 each / $500 total), windows and skylights ($600 total), home energy audits ($150), plus a separate $2,000 per year cap for qualified heat pumps, water heaters, biomass stoves, or biomass boilers. IRC § 25D — the Residential Clean Energy Credit — provided a 30% credit (in effect at termination) on the cost of residential solar PV, solar water heating, geothermal heat pumps, small wind turbines, and battery storage systems, with no annual cap. Both were meaningful federal incentives for energy-efficient remodeling before termination.
What if my Idaho project started in 2025 but finished in 2026?
The relevant test for 25C and 25D was 'placed in service' — meaning the equipment was installed and operational, not when the contract was signed or when materials were delivered. Under P.L. 119-21, property placed in service after December 31, 2025 does not qualify. A project that contracted in fall 2025 but did not install the qualifying equipment until January 2026 would fail the placed-in-service test. On Iron Crest projects with energy-credit implications, we scoped the timeline carefully in late 2025 to hit the December 31 placed-in-service deadline for eligible clients — for 2026 projects, this consideration no longer applies.
Are there any federal energy incentives still available in 2026?
The 25C and 25D residential tax credits are the primary federal residential energy incentives, and both terminated at end of 2025. What remains as of 2026: (1) utility rebate programs — Idaho Power and other Idaho utilities offer rebates on specific energy-efficient equipment; verify current programs at idahopower.com or your local utility. (2) Manufacturer rebates on specific products (heat pumps, appliances) run independently of federal credits and continue. (3) The HOPE for HOMES program and similar Inflation Reduction Act (IRA) rebate programs — status varies by state implementation; verify at energy.gov for Idaho-specific availability. Iron Crest does not track utility rebate program eligibility — direct clients to check their specific utility.
Does Idaho offer state-level energy tax credits or rebates?
Idaho does not currently maintain a broad state-level energy tax credit for residential energy improvements comparable to the (now-terminated) federal 25C/25D. Idaho utilities offer their own rebate programs — Idaho Power for cooling/heating equipment upgrades, Intermountain Gas for gas appliance efficiency, some rural cooperatives for LED lighting and other upgrades. These are utility-specific and change annually. For current Idaho utility rebate programs, check with your specific utility. Idaho state tax reductions (see the Property Assessment & Exemption page) apply to property tax, not income tax; they do not function as energy credits.
How should Iron Crest clients think about energy scope in 2026 without the credits?
Energy-efficient scope in 2026 needs to pencil on operating cost savings and utility rebates rather than federal tax credits. Heat pumps still deliver meaningful utility bill savings vs old furnaces + AC. Insulation still pays back through comfort and heating/cooling bills. Solar still pencils in high-utility-rate scenarios. The federal 30% credit that made 25D-covered solar particularly attractive is gone; the underlying economics may still work depending on your utility rate and roof orientation, but the payback period is longer without the credit. Iron Crest is not a tax preparer — talk to your CPA about your specific 2025 vs 2026 tax filing implications and confirm what P.L. 119-21 means for your specific installation.
IRS — Energy Efficient Home Improvement Credit (25C)
Federal primary source — 25C credit history and termination detail verified 2026-09-25.
IRS — Residential Clean Energy Credit (25D)
Federal primary source for the 25D solar/geothermal credit — also terminated for post-2025 installations.
Idaho Power — Energy Efficiency Programs
Idaho utility rebates that continue beyond federal credit termination — verify current program terms.
Intermountain Gas — Efficiency Rebates
Natural gas utility rebate programs for Idaho customers.
Iron Crest Talks Timing But Not Taxes
RCE-6681702. Confirm your specific tax situation with a CPA. For utility rebate programs, contact your specific Idaho utility. Free remodel estimates.