One Big Beautiful Bill (OBBBA) is now the law of the land, and within its hundreds of pages are many changes, most of which are positive for America’s taxpayers. Under OBBBA, many tax credits for energy saving items are expiring at year-end, and should be understood while they remain available. To qualify for a tax credit, work must be completed and paid for before December 31, 2025.

Residential Energy Credits provide long-term savings from decreased energy consumption, but that may not be the only benefit. In recent years, we (personally) have replaced our residential HVAC units with higher SEER-rated heat pumps and variable speed fans. As a result, the comfort level in our home is vastly improved, while our outlay for monthly electric bills decreased.

From our own records, I compared our summer electric bills from 2010 against this year, using the months of July, August and September. This year’s bills averaged 57% less than those from 2010, despite increases in the price of kilowatt hours. To be fair, we have also replaced most light bulbs with LEDs, but those savings likely provided a small portion of the overall decrease.

Exterior doors and windows are eligible for tax credits, as are skylights. Rooftop solar systems are as well, though the payback period on many of these is quite long. Efficient water heaters, including tankless and electric or gas heat pump styles, may also qualify, and all will save money. (We also switched to LP tankless water heaters, and our LP bills were dramatically reduced.)

Changing out an electric panel may also qualify, and adding insulation is always an effective money saver, often accompanied by improved comfort. Both are eligible for Residential Energy Credits this year.

Residential Energy Credits must adhere to strict guidelines. Understanding the rules is the responsibility of each taxpayer, and a good place to begin discovery is on the Energy Star website (energystar.gov). Claiming tax credits for which you qualify is done on IRS Form 5695, available on irs.gov.

Attention to detail is important, as the rules are strict. However, with the impending expiration of tax credits, anyone who has been contemplating making upgrades should begin immediately to see if their intended upgrades qualify. Remember, a tax credit is a one-for-one dollar savings, rather than a tax deduction. With current budget problems in Washington, Congress is unlikely to extend these expiring credits any time soon.

Potential Electric Vehicle (EV) buyers are not alone in facing a deadline, but the subsidy for EVs is very large, and expiring at the end of September, 2025 (today). The credit may still be claimed by purchasers who have signed a contract by then, even if delivery has not been made. Whether these subsidies will be renewed is anyone’s guess, but there are plenty of savings available to homeowners in the remaining weeks of 2025.